TOPIC :- Distribution
in non life insurance
Introduction
: The first non-life insurance company to set up shop in India was the
Triton Insurance Company of Calcutta In 1972, the non-life insurance business
in India was nationalized with effect from 1st January 1973 The setting up of
the Insurance Regulatory and Development Authority Act of 1999 (IRDAA).
According to the IRDA regulations, the insurer under the General Insurance
Corporation should invest his money in the following way: 20% of the investments
should get diverted to Central Government Securities 30% of the investments
should be in state government and other guaranteed securities 5% investment
should be made in the housing sector and state government loans 10% of the
investment should be done in the infrastructure and the social sector. India
accounts 3.2% of the Asia-Pacific non-life insurance market value The Indian
non-life insurance grew by 13.8% in 2009 to reach a value of $7.8 billion The
market value forecast, by 2014 the Indian non-life insurance market has the
value of $11.3 billion The New India Assurance Ltd is the leading player in the
Indian non-life insurance market, generating a 16.9% of the market value
Discussion : Distribution
Scenario in the Indian market
In today's Indian insurance market,
the challenge to insurers and intermediaries is two-pronged:
•Building
faith about the company in the mind of the client
•Intermediaries
being able to build personal credibility with the clients Traditionally tied
agents have been the primary channels for insurance distribution in the Indian
market; the public sector insurance companies have their branches in almost all
parts of the country and have attracted local people to become their agents.
The agents are from various segments in society and collectively cover the entire
spectrum of society. A person who has lived in the locality for many years
sells the products of the insurance company with a local branch nearby. This
ensures the last mile touch point being closer to the customer. Of course, the
profile of the people who acted as agents suggests they may not have been
sufficiently knowledgeable about the different products offered, and may not
have sold the best possible product to the client. Nonetheless, the customer
trusted the agent and company. This arrangement worked adequately in the
absence of competition. In today's scenario agents continue as the prime
channel for insurance distribution in India, as is the case in most markets, supported
by call centers to a small extent. Almost all the new players follow this model
primarily because the regulations for other channels are yet to be put in
place. However there is great excitement in the industry over the impending
broker regulations, and companies are planning possible channels in their
enthusiasm to increase volumes. The belief that all these channels will grow
and seamlessly integrate to bring in business seems a fallacy. What has emerged
is a much more difficult and evolving market scene with existing players, more
new players coming in, and global marketing practices and ideas being tested.
But none of this has changed the fundamental character of the market, which we
believe will take more time than expected.
Conclusion:
The
current state of insurance distribution in India is still in flux. On one hand,
insurers are awaiting regulations to be approved for brokerages and
bancassurance to be truly launched. On the other hand they are trying the
corporate model of intermediaries in addition to the traditional models in the
market. There is no right and wrong in all this. The success of marketing
insurance depends on understanding the social and cultural needs of the target
population, and matching the market segment with the suitable intermediary
segment.
too Long????
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