Know why only 30% of consumers are okay with pure digital insurance, and most still rely on agents for high-value policy

Despite the insurance sector pouring billions of dollars into digital transformation and direct-to-consumer platforms, it is hitting a firm ceiling when it comes to pure digital checkouts.

Consumers are surely utilising these digital assets for extensive pre-purchase research, but the final mile of the transaction still remains overwhelmingly human.

According to a new joint study by Google and McKinsey & Company, fewer than 30% of buyers are comfortable purchasing high-value policies through a purely digital checkout.

Instead, the report found that this massive shift in consumer behaviour has given rise to the “Digitally Influenced, Closed with Assistance (DICA)” buyers— “These consumers are digitally native, doing their research and prioritisation online and then deliberately seek out advisors to validate their choices.”

According to the report, ‘Decoding the DICA Consumer’, nearly 80% of the insurance journey in India now unfolds online. However, these consumers deliberately pause before the final transaction, seeking out human advisors for highly specific reassurances.

“Consumers turn to advisors primarily to confirm long-term capital safety, secure human advocacy during hospital claims, and clarify exclusions,” the report said.

Broken offline handoff

This reliance on human agents to close online leads has exposed a major structural flaw for legacy insurers: their digital and offline teams operate in silos, creating a frustrating handoff for the buyer.

“Over 40% of buyers express frustration at starting over as anonymous leads and having to repeat their requirements, while more than a third cite generic sales scripts that fail to reflect context,” the report found.

The data showed that digitally informed buyers are significantly higher-value customers: “offline purchases influenced by online research generate approximately 40% higher policy premiums compared to traditional sales.”

Power of digital shortlist

While the human agent remains crucial for closing the sale, their ability to influence brand selection is shrinking. In a market crowded with over 60 insurers, 78% of consumers narrow their evaluation to just two or three brands online before even speaking to an advisor.

This digital prioritisation is incredibly sticky. Over 50% of consumers stand by their original digital shortlist after speaking with an agent, effectively pre-locking their brand conviction long before the offline meeting occurs.

Overall, this digital deliberation directly influences 40% of all health and life insurance sales in the country.

“The DICA consumer highlights that purchasing insurance in India is an intricate journey where no single touchpoint or advisor operates in isolation,” said Siddharth Shekar, Director, Google India.

“When the digital ecosystem directly influences more than 40% of all insurance purchases, the online shortlist becomes an important decisive factor. Closing the gap between a consumer’s digital evaluation and their offline advisory experience is now the biggest lever for insurance penetration and value creation,” Shekar added.

How is India researching? AI, video, and non-metros

Consumers are actively turning to AI-powered search to understand complicated insurance terms. Long queries now account for 18% of insurance searches on Google, with 41% of users utilising AI Overviews to compare options and firm up their coverage requirements upfront, the report found.

Video has also become the default format for breaking down complex financial products. Approximately 60% of online insurance researchers use video during their journey, driving insurance-related views on YouTube past 2.5 billion over the past year, the report said. Increasingly, this research is becoming a shared household activity, with over 15% of these YouTube views happening on Connected TVs.

Crucially, this digital-first approach to research is no longer confined to young, metro-based early adopters. Consumers in top non-metro cities conduct roughly twice as much online research before buying a policy compared to the national average. Salaried professionals aged 25-35 represent the single largest demographic driving this digital deliberation.

Industry shift

For life and health insurers, the report’s findings underscore a necessary pivot from viewing digital and offline channels as competitors to integrating them seamlessly.

“The future of insurance distribution will not be defined by where customers buy, but by how effectively we connect digital discovery with trusted advice,” said Sumit Madan, Managing Director and CEO, Axis Max Life Insurance. “When more than 40% of policies are already digitally influenced, the industry’s next growth opportunity lies in converting informed intent into meaningful protection.”

Parthanil Ghosh, Managing Director and CEO, HDFC ERGO General Insurance, noted that resolving this friction will ultimately drive wider adoption.

“The emergence of the DICA consumers will boost awareness and accessibility in the insurance sector,” he said. “For insurers, enabling this journey seamlessly across their omnichannel distribution network like advisors, websites, mobile apps and other digital platforms, can help in building consumer confidence and trust, and thereby increase insurance penetration in India.”