The Life Insurance industry may be going through a bumpy ride but some life...
The Reserve Bank of India (RBI) being the regulatory authority of the banking system, recognizing the need for banks to diversify their activities, permitted them to enter into the insurance sector through the bancassurance model.
Bancassurance refers to banks acting as corporate agents for insurers to distribute insurance products by combining them with their typical banking products or services. The blending of life insurance and non-life insurance products while promoting their own banking products acts as a value addition without any additional efforts.
India has one of the largest banking networks in terms of branches throughout the country. The bancassurance strategy however is not turning out to be as effective as banks are finding it difficult to attract new customers. They are now looking to expand their agent base to increase their insurance penetration.
Star Union Dai-ichi, in an effort to enhance its distribution channel, is now looking to expand its agent’s base by recruiting 5,000 agents. Companies like IndiaFirst Life Insurance and IDBI Federal Life are also planning to double their agent base in the next 12 months.
K Sahay, Managing Director and CEO of Star Union Dai-ichi Life said that they need alternate channels outside the bancassurance route and are planning to build a strong agency network.
IndiaFirst Life recently entered the internet space by adopting the ‘buy online’ model to reach out to prospective customers.