Life Insurance Distribution

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Life Insurance Distribution

  1. 1. Distribution Channels: Vital link in the economics of Insurance R. Krishnamurthy MD, SBI Life FICCI Conference Sept. 25’ 02.
  2. 2. Role of Distribution Channels in Value Creation in insurance companies <ul><li>Distribution accounts for the largest element in insurers’ costs and impact the profitability. </li></ul><ul><li>Distribution capabilities strongly influence product design in insurance. </li></ul><ul><li>Distribution channels have a direct impact on the insurers’ market image. </li></ul><ul><li>Integrity of distribution channel is the key concern of the regulatory mechanism. </li></ul>
  3. 3. Opening up India’s insurance sector: Key influences on Distribution channels <ul><li>Emergence of alternative channels such as Bancassurance and Corporate Agents is reshaping the insurance industry. </li></ul><ul><li>Insurance penetration levels will rise sharply with multi distribution channel. </li></ul><ul><li>Widespread recognition of the need for qualified, trained sales force to serve the increasingly discerning insurance buyers. </li></ul><ul><li>Emergence of online and offline insurance education and training initiatives is changing the range and quality of insurance services. </li></ul>
  4. 4. Opening up India’s insurance sector: Key influences on Distribution channels <ul><li>Emergence of new channels will have positive impact on rebating and such undesirable practices in the industry. </li></ul><ul><li>Widening choice of distribution channels will eventually drive down the premium level. </li></ul>
  5. 5. Evolution of alternate Distribution channels in India: Areas of supportive official measures <ul><li>Need to encourage and nurture new channels such as Bancassurance to utilise the existing infrastructure to optimum extent. </li></ul><ul><li>Policy measures should encourage insurers to take full responsibility for training and skill building. </li></ul><ul><li>Encouraging self-regulation. </li></ul><ul><li>Strengthening the consumer grievance redressal mechanism. </li></ul>
  6. 6. Importance of Distribution Channels <ul><li>In Sum: </li></ul><ul><li>We need more alternative channels in India to sharply increase penetration levels. </li></ul><ul><li>Emergence of new channels is in the interest of consumers. </li></ul><ul><li>Widening and strengthening the channels will help the insurance industry to become more competitive and healthy. </li></ul>

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