Evolution of
Distribution Channels
Niraj Jain
Principal Officer
Bonsai Insurance Broking

Agenda
 Definition
 Distribution: the Key Differentiator
 Challenging Distribution Scenario
 Distribution Scenario in the Indian Market
 Future of Distribution Channels in India
Q&A

Definition
Distribution :
 The act of spreading or apportioning.
 The commercial activity of transporting and selling
goods from a producer to a consumer.
Channel :
 Any distinct part of a distribution system through which
a supplier reaches a customer.
Distribution Channel :
 The mechanism by which products are directed to
customers either through intermediaries or direct.

Distribution : The Key Differentiator
 Quality of advice,
 Choice of product,
 Servicing of policy post sale
 Settlement of claims.
 Managing Distinct cultural and social ethos
 Don’t Sell but Market an essential financial product.
 Behave as trusted financial advisors

Challenging Distribution Scenario
Insurance has to be sold the world over and the following
remain the challenges of the changing distribution scenario :
 Developing multiple distribution channels as the prime touch
point with the ultimate customer
 Leveraging multiple distribution channels in a cost effective
manner
 Leveraging multiple distribution channels in a customer
friendly manner.
 Building faith about the company in the mind of the client
 Intermediaries being able to build personal credibility with the
clients

Distribution Scenario in Indian Market
 Ancient India
 British Raj
 Nationalization of insurance
 Liberalization

Ancient India
 Spiritual Rishis / Prophets
 Kings
 Joint Hindu Family Head / Village Head
 Business Associations
 Religious Trusts

British Raj
 East India Company
 Village Head / Sarpanch
 Business Associations

Nationalization of Insurance
 Development Officers
 Direct Agents
 Local Finance Dealers / Consultants
 Hoardings / Bill Boards
 Paper Advertisements
 Direct Marketing

Liberalization
 Insurance Brokers
 Corporate Agents
 Banc assurance / Brand assurance
 Micro Insurance
 Stock Broking Houses / Financial Institutions
 Work Site Marketing
 Tele Sales / Call Centers

Insurance Brokers
 Insurance Portfolio Management as the Core Business Activity
 One Stop Shop for multiple Brands
 Transparent & Professional Comparison
 Quality Post Sales Service
 Efficient & Effective Claims Handling
Corporate Agents
 Easy to set it up with Lesser Regulation Hassles.
 Trust and Faith of the Existing Customers
 Quick Access to Multiple Locations
 Better Conversion Rate
 Additional Revenue Stream

Bancassurance / Brandassurance
 Expertise of selling Financial Products
 Better Relation & Trust towards the Brand
 Better Understanding of the Financial Stability
 Better Staff Productivity & ROI
 Competitive Edge over other industry players
Stock Broking Houses
De – risking of Business Model
Customer sticks to the Broking House if offered Valued Services

Micro Insurance
 Insurance is a common concept in developed countries. That is
different in many emerging economies and developing countries
where insurance penetration is low and the idea of pooling a risk
among several members of a community in an organized fashion
is rare. This means that investing in educating people on risks and
how to manage them, including insurance, is often the first
important step.
Success of Micro Insurance
 Designing of Need Based Specific Products.
 Volume Sales is resulted increase in Turnover
 Higher Penetration among the Rural Markets
 Higher Awareness about Insurance Products and Programs
 Structured approach and planning to fight Natural Calamities

Work Site Marketing
 Direct Communication with the employees
 No Cost for the Host Organization to conduct it.
 Expert Consultants at Doorstep to offer personalized benefits
 Minimal Paper Work and On the Spot Solutions
 Portable benefits for employees even if he changes jobs
Tele Sales / Call Centers
 Reduced costs per sale
 Increased Qualified lead generation
 Better Customer Conversion and retention
 More immediate and better feedback on new Campaigns
 Increased local, regional, or national market share

Future of Distribution Channels in India
 Online Insurance Aggregators
 Kiosks / ATM Centers
 Mobile / PDA
 Affinity Channels and Groups
 Super Markets and Retail Chains
 Black Box Collection Centre
 Smart Cards
 E - Wallet

KiosKs / AtM CEntErs / MobilE / pDA’s
 Quick Selling of OTC Products
 Immediate Policy Prints
 Platform to Cater for Last Minute Insurance Needs
 Ideal for Low Cost Products
 Ideal for Mandatory Insurance Products
 Brief Comparison and Product write up
 Ideal for Customers on the Move
 Real Time Chat with an Insurance Expert
 Online Payment for Fresh and Renewal Policies
 Introduction of Daily Premium Payment

Affinity Channels & Groups
 The opportunity to cross-sell, facilitating income stream enhancement
 Improved value-added offering
 Customization and personalization of product
 Recognition and loyalty created through Co-branded products
 Complementary fit with direct distribution due to product simplicity
Super Markets and Retail Chains
 High Customer Foot Falling
 HNI Customers at Leisure and with Time on Hand
 Minimal Customer Profiling and Screening Required
 Sold via Combo Offers (Buy laptop and Get Insurance Free)

Black Box Collection Cards
 Monitors Driving Habits
 Monitors Auto Care
 Monitors Safety Precautions
 Will Help determine Bonuses and Loadings
 Premium Discounts if Black Box Driving details shared
 Premium Charged on Per Mile basis on Journey Risk Parameter

Smart Cards
 Smart cards are small & Secure
 Smart card can contain digital log with location, date, time, to record every
transaction
 Smart card can contain digital prescriptions, no mistakes with
handwriting, quantity or quality of medications
 Smart health card could be used anywhere, on the street by medical
emergency crew to quickly learn about allergies and treatments, even if
injured person is un-capable to interact with anybody
 Insurance, administrative and personal ID data are available
 Smart card could be used in hospital, country, town, state etc
 Smart health cards speed up medical administration, put it in right format
(HIPAA), process claims faster and more precisely
 Smart health card help actively fighting medical fraud and critical errors

E - Wallets
 A simple and convenient way to transact online from anywhere at any time. With
this service one can create its own e-Wallet and assign accounts to it. After that
shop / donate / subscribe / pay online with the list of Merchants and authorize the
transaction from the chosen bank account using your transaction ID &
password. Moreover, transactions can be viewed online.
List of Merchants :
Broadband /
Telecom Utility Mutual Fund Life Insurance Tours/Travel Shopping
Networking
Andhra Pradesh
Bharat Sanchar Birla Sun Life ICICI Prudential Life
Central Power Akbar Travels Net 4 India Ltd CCAvenues
Nigam Ltd (BSNL) Mutual Fund Insurance
Distribution Co Ltd
Fidelity Mutual
Bharti Airtel BSES Rajdhani Kotak Life Insurance Cox and Kings India Tata Indicom Goa e Shop
Fund
Videsh
ICICI Prudential EzeeGo One Travels
IDEA Cellular BSES Yamuna LIC Of India Sanchar Nigam ITZ Shop
Mutual Fund & Tours
Limited
Mahanagar
Reliance Life Le Passage to India You Telecom
Telephone Nigam Ltd Mahanagar Gas Ltd Kotak Mutual Fund Paysignet
Insurance Tours & Travels (Iqara)
(MTNL)
Maharashtra State
Principal PNB
MTNL Dolphin Electricity General Insurance Travel Guru Trading Pune e Shop
Mutual Fund
Distribution
Maharashtra State Reliance Mutual Reliance General Kotak
MTNL Garuda YATRA Tata Sky Ltd
Electricity Board Fund Insurance Commodities
North Delhi Power Tata AIG General
MTNL Mumbai SBI Mutual Fund Railways Navia Markets Vizag e Shop
Ltd. Insurance
Reliance
Reliance Energy Ltd UTI Mutual Fund Donation IRCTC Sharekhan Entertainment
Communications
Recruitment / Child Rights & You Mumbai Subarban
Tata Indicom Education Religare
Careers (CRY) Season Ticket
Computer Society of Shree Siddhivinayak
Vodafone (Hutch) GULFJobs Seventy MM
India Temple Trust
Manipal Academy for Web 18 Online
Higher Education Services Ltd

Q &A