With an aim to become a leading online insurance provider, the Indian venture of Warren Buffett-led Berkshire group is betting big on the popularity of mobile phones and social media to boost its business.
Berkshire India sells motor, travel and health insurance products online at on BerkshireInsurance.Com and it will soon start selling life insurance products as a corporate agent of Bajaj Allianz Life Insurance.
The company uses a unique mode for insurance sales through Internet and expects the growing popularity of Internet- enabled mobile devices, such as smartphones and tablets, to further aid to this cost-effective business model."...Over half of India's total Internet user base will access Internet solely through mobile or tablet devices by 2015. Since our direct model of business employs telephone and Internet, we are positioned to enjoy a great advantage," BerkshireInsurance.Com CEO Arun Balakrishnan told PTI."We are confident of our business model and are continually developing it to make it even more efficient and cost effective," he said.
India is estimated to have the world's third-largest Internet user base of 120 million people.
Berkshire India also expects social media platforms like Facebook and Twitter to play an increasingly crucial role. "As we progress towards becoming the one-stop shop for insurance, our aim is not just to sell insurance but to help the customer understand the nuances of insurance. It is here that social media plays a major role... We realise that the major attraction of the online mode for a customer is a relatively cheaper pricing," Balakrishnan said.
Ajit Jain, Berkshire Hathaway's global head of reinsurance business and often seen as a possible successor to Warren Buffett, also plays an active role in its Indian operations. "Ajit Jain is a part of the Board of Berkshire India Limited and a regular participant in our discussions and formulations. Being actively involved and well versed with our operations, Jain is both aware and happy of our progress as a company," Balakrishnan said.
Asked about life insurance business plans, he said life insurance is a different ball game all together but with adequate research, it expects to introduce life products well- suited for the online medium."Products that are both a good value proposition for the customer and viable to sell online," he said. "As use of mobile Internet increases, our penetration to the rural and semi-urban areas will grow rapidly given that a large part of our web traffic today stems from mobile devices. Our rural penetration is expected to closely toe that of the telecom sector," Balakrishnan said.