Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
800
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
10
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Financial Intermediaries in Non-Life Insurance FICCI October 16, 2001
  • 2. Current Industry Scenario
    • Low business and territorial penetration levels - need for new distribution channels
    • Poor marketing strategies, lack of innovation in designing & pricing the product - New products and better packaging
    • Low service standards - Need for improved customer service
    • Poor Risk Management Practices - Prudent underwriting practices in line with international standards.
    • Intermediaries to play a key role in fulfilling the above needs.
  • 3. HR Seminar
    • WHY AM I HERE ?
    • The success of the Insurance business depends on the role played by the intermediaries.
      • In the Indian context -role of intermediaries in :
        • Life insurance business for procurement and servicing.
        • General Insurance business - presently for servicing e.g. settlement of claims
        • New Insurance Companies are getting organised - ability of the company to develop a complete network of robust intermediaries is key to success.
    • Relevance and challenges in intermediation of the insurance business cannot be underestimated.
    • Specialists to speak on various topics related to intermediaries training & HR interface
  • 4. Definition
    • What is Insurance ???
      • Insurance is all about a promise of a payment / service.
      • Emerging Customer centric Business Model in India
  • 5. The Changing Context In India
    • Personal Lines -
        • Car repair syndrome
    • Commercial Lines
        • Fire claims syndrome
  • 6. Challenges Ahead : Global context
      • The emerging expectations
        • of the promise
        • of the intermediaries
      • Managing these expectations
        • Long haul process of change management
  • 7. Presentation Flow
    • No of Slides
    • Intermediaries 3
    • Current Scenario 4
    • Intermediaries - a schematic 1
    • Personal Lines Business 4
    • Motor product Intermediaries 2
    • Commercial lines 1
    • Other Issues 1
    • Summing up 2
  • 8. Intermediaries
    • Definition
      • The link between insurer and insured (Customer) for insurance sales and service.
    • Key/Formal Insurance intermediaries include
      • Insurance Agents
      • Brokers
      • Insurance Consultants
      • Surveyors and Loss Assessors
      • Third Party Administrator
      • Reinsurance Broker
  • 9. Intermediaries (contd.)
      • Other Intermediaries :
        • Co-operatives
        • Actuaries
        • IT Systems provider
        • Rating agencies
        • Any other person assisting and representing an Insurer in any of the following:
          • Soliciting, negotiating, procuring or effectuating an insurance contract or its renewal;
          • Disseminating information relating to coverage or rates;
          • Forwarding an insurance application;
          • Servicing and delivering an insurance policy or contract
  • 10. Intermediaries (contd.)
        • Inspecting a risk;
        • Setting a premium rate;
        • Investigating or assessing a claim or loss;
        • Transacting a matter after effectuation of a contract;
        • Representing a matter after effectuation of a contract;
        • Representing or assisting an insurer or other person in any other manner in the transaction of an insurance contract;
        • Servicing a policy or contract.
    • The total intermediation equation has to be right to be a successful insurance company in the new environment.
  • 11. Current Scenario
    • Key Intermediaries
    • Agents
      • Primacy to insurer’s interest (FACE OF INSURANCE COMPANY)
      • Cannot represent multiple insurers hence are “tied” to an insurer
      • Practical training and passing of examination is mandatory and sponsored by one insurer
      • Discourages switching of Insurers
    • Broker
      • Primacy to insured’s interest
      • Can represent multiple insurers to provide suitable products to the insured
      • IRDA has formulated regulations governing insurance brokers (to be passed)
  • 12.
    • Key Intermediaries
    • Surveyor / Loss Assessor
      • To examine the claim and assess the actual loss suffered
      • To submit a report for the consideration of the insurance company
    • Third Party Administer (TPA)
      • Arises mainly out of Managed Health Care business.
      • Only “companies” registered under The Companies Act, 1956 are allowed to act as TPA
      • IRDA is finalising regulations governing TPAs.
    • Reinsurance Brokers
      • Link between insurer and reinsurance organisations
        • Incentivised by the reinsurer for annual treaties and facultative deals
    Current Scenario (contd)
  • 13. Current Scenario (contd)
    • Appointed Actuary
      • Provides actuarial advice to the management.
      • Assurance to IRDA
    • Co-operatives
      • Reach in rural areas
      • rural populace more comfortable while dealing with cooperatives.
    • IT Systems provider
      • Essential support for all new Insurance companies
      • IT systems backbone of the operations
    • Rating Agencies - AM BEST, Standard & Poor, Moody’s
  • 14. Current Scenario (contd)
    • Skill set of an agent and broker
      • Customer orientation
      • Advice customer according to needs
      • Ability to sell multiple products
      • Provide market intelligence
      • Good working knowledge of IRDA regulations and willingness to adhere to it
  • 15. Surveyor/ Loss Assessor Third Party Administrator Intermediaries - a schematic Reinsurance Broker Broker Insurance Company IT Systems Provider Bancassurance Actuary Other Intermediaries Agent Risk Advisory Corporate Individuals Co-operatives
  • 16. Personal Lines Business - Backdrop
    • Untapped potential largely due to
      • Lack of product knowledge and brand recall
      • Absence of a customer centric approach
      • Products not addressing the changing trends in customer needs
      • Low penetration due to inadequate marketing / delivery system
      • Absence of risk-cum-investment tools resulting in low involvement buying behavior
      • Unattractive commission structure
  • 17. Personal Lines - Opportunity Ahead
    • Increased consumerism
    • Increased social instability
    • Higher disposable incomes
    • Operation of law
    • Changing attitudes
    • Easier availability
    • Increased medical cost
  • 18. Some Challenges Ahead
    • Need to develop state of the art training institutes focussing on sales & management
    • Put in place scientific selection / recruitment of Intermediaries
    • Promote, encourage professional association of intermediaries and self-regulation concepts
    • Marketing support to distribution channels
    • Link business strategy more effective with technological reality
    • THERE IS URGENT NEED TO CREATE AN ENVIRONMENT/STRUCTURE, INCLUDING TRAINING CENTRES/EDUCATION TO ENHANCE CAPACITY BUILDING OF INTERMEDIARIES.
  • 19. Suite of Personal Line Products
    • Motor
    • Home & Home content
    • Health
    • Overseas Travel
    • Education
    • ...
    • Each line of business requires its own selling and processing intermediaries and dependency vary across the products
    • MULTI DIMENSIONAL MANAGEMENT MATRIX
  • 20. Motor Product Intermediaries
    • Sales
      • Agents for vehicle insurance
        • Manufacturers wanting to become agents / brokers to provide one stop services to their customers
        • Auto Dealers: point of sale influencers in the value chain
        • Direct Marketing Agents:decision influencers at the point of provision of finance
    • Services
      • Surveyors
        • Assessing vehicle damage
        • Examining, Inquiring and Investigating the causes and circumstances of loss
        • Estimating measuring and determining the quantum of loss
  • 21. Motor Product Intermediaries (contd.)
    • Garages and Workshops to carry out actual repairs
    • Other Service Intermediaries
      • Towing service providers
      • On the spot repairs
      • Trauma services
        • Ambulance providers
        • Blood banks
  • 22. Commercial Lines- Intermediary Challenges
    • Key Issues
      • Business to Business vis-à-vis Business to Customer in PL
      • Key differentiation
        • Sales Process
          • Different skill sets and role of Agents / Brokers
            • More personalised approach
          • Risk Assessment Intermediary
        • Claims Servicing
          • Role of surveyor critical
  • 23. Other Issues
    • Bancassurance
    • Direct Channels
  • 24. Summing Up - Emerging Scenario
    • Emerging trend
      • Channels to evolve according to market opportunities /economics
      • Agents/Brokers will align to market and customer profile
    • Implies
      • Undertake agent profiling by doing intermediary mining
      • Align agents to products being sold and customers being targeted over time
  • 25.
    • Learning from banking industry?
    • Local flavour to play important role
    • Rules of the game will be written by Indian Companies
    • Key to success is keep ear to the ground and keep modifying as per changing requirements
    • Fit ground realities to your organisation’s business strategy
    Summing Up - Looking ahead
  • 26. Thank You
  • 27. Backdrop - Motor Insurance claims Insurance Company Garage owner Surveyor Car Dealer Agent or Broker Towing & other Services Financier
  • 28. Backdrop - Fire Insurance claims Insurance Company Surveyor Salvage Buyer Repairer Agent/Broker
  • 29. Insurance Education Insurance Education Management cadre Operational level Domestic Training Overseas training Intermediaries
  • 30. Direct Channels
    • Minimum physical contact
      • Call Centres
        • Ideal for renewal business
        • Economic dispensing of insurance related information
        • Service related guidance and support
      • E-Intermediaries
        • Internet based information dispensing
      • Other remote terminals
        • ATMs
        • Kiosks
  • 31. Banks as an Agent - Bancassurance (?)
    • Provides readymade customerbase
    • Approx. 70,000 bank branches
    • Insurance products can be linked with banking products
    • Comfort for customers since he is accustomed to doing regular monetary transactions with the bank.
    • Reach potential middle / lower class population
    • Ease in sale of standard products
    • Sales experience in other products
        • Mutual funds
        • Credit cards
        • Personal loans
    • Essential to keep the products simple
      • Pre-underwritten product guidelines