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8/12/2019 Deleted Channls ,Opprtunities in Bank

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Submitted to Amity University for the fulfillment of MBA (Insurance

& Banking) in ASIBAS

OPPORTUNITIES AND CHALLENGES IN THE

DISTRIBUTION CHANNELS OF INSURANCE SECTOR

FACULTY MENTOR:-

MR. B.R. SINGH

AAST. PROFSR ASIBAS

SUBMITTED BY:ABHISHEK YADAV


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Acknowledgment

It gives me immense pleasure to convey my sincere gratitude to prof. B,R SINGH who

extended his full and invaluable support and encouragement in providing me with this

excellent opportunity to learn through this highly informative project work.

I would like to thank my faculty for his guidance and constant supervision as well as for

providing necessary information regarding the project & also for his support in

completing the project.

Abhishekyadav


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Declaration

I hereby declare that the project work entitled

OPPORTUNITIES AND CHALLENGES IN THE DISTRIBUTION CHANNELS

OF INSURANCE SECTOR

, submitted to the AMITY UNIVERSITY is a record of anoriginal work done by me

under the guidance of Faculty mentor, Mr. b.rsingh , AMITY UNIVERSITY, UTTAR

PRADESH, and this project work has not performed the basis for the award of any

Degree or diploma/ associate ship/ fellowship and similar project if any.


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Table Of Contents

SR. NO PARTICULARS PAGE NO.

1 INTRODUCTION 4

2 INSURANCE

NEED

7

3 SECTOR PROFILE 8

4 INDUSTRY

CLASSIFICATION

10

5 LITERATURE

REVIEW

16

6 RESEARCH

METHODOOGY

17

7 DATA ANALYSIS 21

8 FINDING AND

OBSERVATIONS

34

9 SUGGESTIONS 35

10 CONCLUSION 36

11 BIBLIOGRAPHY 37

12 ANNEXURE 38


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INTRODUCTION


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Insurance can be defined as protection against the unfortunate consequences of futureevents, by transferring the possible risk of loss from a person or organization (i.e.insured) to the insurer. In order to enjoy the benefits of insurance, the insured pays acertain sum amount of money to the insurer which is known as premium (i.e. cost ofinsurance cover). The event or accident, which may cause a loss is called a peril. The

business of insurance gives an assurance that the benefit will be protected. This assuranceis given only if the peril is likely, but not certain. If its occurrence was known to becertain, insurance would not have been possible. Insurance does not protect the asset. Itdoes not prevent its loss due to the peril. The peril cannot be avoided through insurance.The peril can sometimes be avoided, through better safety and damage controlmanagement. Insurance only tries to reduce the impact of the risk on the owner of theasset and those who depend on that asset. Only economic or financial loss can be

compensated through insurance.

The concept of insurance can be understood as that of risk pooling. For example:certain coastal areas are likely to face severe floods or typhoons. People staying in thoseareas are all exposed to the same risk of being affected by the damages caused by thesestorms. All of them will made members of a pool by the insurance companies with theunderstanding that if anyone of them suffers damage, all in the pool would contribute andshare the damage. The insurance company only acts as an intermediary to bring togethermembers of a community all of whom are likely to experience the same adversity andmake them share the adversity which may be experienced by any one of them. The

arrangement reduces the suffering of one, by distributing the same among many.

An increasing number of insurers are using multiple distribution channels as theycontinue to balance the needs of different groups of consumers against the cost ofdistributing their products and services. When it comes to insurance distributionchannels, one size does not necessarily fit all.


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Appended below are the various distribution channels:

Insurance Agents Trade Specific Agents (TSAs) Insurance Brokers Bancassurance Online Internet Portals Direct Marketing Cell phones /pda Worksite marketing Digital tv/satellite selling Supermarkets and other retail outlets Affinity channels and groups Insurance specific debit and credit cards Call centers

Insurance Agents

An insurance agent is defined under the Insurance Act (Cap. 142) as a person who is orhas been carrying on insurance business in Singapore as a registered agent for one ormore insurers, and includes an agent of a foreign insurer carrying on insurance businessin Singapore under a foreign insurer scheme under Part IIA of the Act. Individual agentsor corporate agencies can employ nominee agents to assist them in their businesstransactions.

For the purpose of registration with the ARB as an insurance agent pursuant to themandatory requirements of the Notice No: MAS 211, an applicant may be classifiedunder any one of the following:

Individual agents Corporate agents; i.e. sole proprietorship/partnership company registered with the

Account and Corporate Regulatory Authority, society/cooperative societyregistered with the Registrar of Societies; and Trade Specific Agents

All the above-mentioned entities may appoint nominee agents, including individualagents.

Trade Specific Agents (TSAs)
http://www.gia.org.sg/public_market_structure_distribution.php#agentshttp://www.gia.org.sg/public_market_structure_distribution.php#tradehttp://www.gia.org.sg/public_market_structure_distribution.php#brokershttp://www.gia.org.sg/public_market_structure_distribution.php#assurancehttp://www.gia.org.sg/public_market_structure_distribution.php#portalshttp://www.gia.org.sg/public_market_structure_distribution.php#marketinghttp://www.gia.org.sg/public_market_structure_distribution.php#marketinghttp://www.gia.org.sg/public_market_structure_distribution.php#portalshttp://www.gia.org.sg/public_market_structure_distribution.php#assurancehttp://www.gia.org.sg/public_market_structure_distribution.php#brokershttp://www.gia.org.sg/public_market_structure_distribution.php#tradehttp://www.gia.org.sg/public_market_structure_distribution.php#agents


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TSAs are engaged in a business of which insurance is not their core business, and usuallysell only one type of insurance product (e.g. travel agents selling travel insurance) in thecourse of their other business activities.

The list of Trade Specific Agent types are as follows:

Freight Forwarders Foreign Domestic Worker Agencies Foreign Worker Agencies Motor Dealers Travel Agents Electrical Protection Sellers

The General Insurance Agents Registration Regulations (GIARR) specify that a person(individual or entity) shall not arrange, or hold himself out as entitled to arrange, acontract of insurance as an agent for an insurer, unless and until he has:

Been duly registered with the ARB of the GIA (the registered agent beingclassified as either a "Cash Agent" or "Credit Agent"), and is issued with aCertificate of Registration by the ARB; and

Entered into an agency agreement in writing with his principal (the insurer that heis representing).

Before commencing and representing any insurers in selling insurance, all generalinsurance agents and Trade Specific Agents (TSAs) must register with the Agents

Registration Board (ARB) of the General Insurance Association of Singapore (GIA)through their principal insurers. The ARB will issue each of them with a unique GIAnominee number. Consumers can authenticate and confirm if an agent is registered withthe ARB and is authorised to transact general insurance business with the insurer byverifying the agents details in the agent search module on the GIA website at

https://www.arcm.com.sg/arcmv2/App/UI/Common/SearchAgentInfor.aspx?strApplicationType=SearchNominee

All general insurance agents are required to comply with the following:

General Insurance Agents Registration Regulations

Fit and Proper Criteria The Code of Practice for Agents; and Continuous Professional Development (CPD) Requirements, except for Trade

Specific Agents.

Under the Code of Practice for Agents, an agent shall not enter into any agreement orarrangement whatsoever for the appointment or engagement of any sub-agent.
https://www.arcm.com.sg/arcmv2/App/UI/Common/SearchAgentInfor.aspx?strApplicationType=SearchNomineehttps://www.arcm.com.sg/arcmv2/App/UI/Common/SearchAgentInfor.aspx?strApplicationType=SearchNomineehttps://www.arcm.com.sg/arcmv2/App/UI/Common/SearchAgentInfor.aspx?strApplicationType=SearchNomineehttps://www.arcm.com.sg/arcmv2/App/UI/Common/SearchAgentInfor.aspx?strApplicationType=SearchNomineehttps://www.arcm.com.sg/arcmv2/App/UI/Common/SearchAgentInfor.aspx?strApplicationType=SearchNominee


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Insurance Brokers

They are registered under the Insurance Act (Cap. 142) to carry on insurance business asagents of insureds or intending insureds. They advise individual or corporate buyers of

insurance on their insurance needs. They act on their clients' behalf to negotiate andobtain the most appropriate insurance covers at competitive premium rates from theirinsurers, exercising care and skill in doing so.

Currently, insurance brokers in Singapore are generally classified under the followingcategories:

Direct insurance brokers General reinsurance brokersplacement of reinsurance risks for general insurers;

and Life reinsurance brokersplacement of reinsurance risks for life insurers.

Reinsurance brokers negotiate reinsurance contracts between the ceding insurers andreinsurers. They generally represent the ceding insurers for placing the reinsurance

business and perform other necessary services.

A list of the insurance brokers licensed by MAS is available on the MAS website athttp://www.mas.gov.sg/fi_directory/index.html

Unlike an agent, a broker is free to place the clients insurance business with any number

of insurers. His duty is to provide independent expert advice on a wide range of insurancematters to the client. These include identifying the best type of cover to meet the clientsinsurance needs, and providing assistance when an insured makes a claim. The broker hasto exercise due care and diligence in understanding and satisfying the insurancerequirements of the client, and take all reasonable steps to act fairly in the interests of theclient. Although insurance buyers (i.e. ordinary retail consumers) may deal with insurersdirectly, the vast majority of commercial businesses (i.e. insurance covers bought bycompanies) are usually transacted through registered brokers. The complexity of manycommercial risks and large premiums involved often render a brokers services

invaluable to the insured.

As required under the Insurance Act (Cap. 142), an insurance broking company musthave in force a Professional Indemnity Insurance Policy.
http://www.mas.gov.sg/fi_directory/index.htmlhttp://www.mas.gov.sg/fi_directory/index.htmlhttp://www.mas.gov.sg/fi_directory/index.html


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Bancassurance

Banks, including finance companies, with their huge database of customers, sellinsurance through a network of branches. Almost all of the local banks in Singapore ownor have partnership agreements with insurance companies.

Bancassurance is the term used to describe the partnership or relationship between a bankand an insurance company, whereby the insurance company uses the bank sales channelin order to sell insurance products, most of which are personal lines.

Bank staff members, rather than insurance agents, become the point of sales or point ofcontact for customers. Bank staff members are advised and supported by the insurancecompanies through product information, marketing campaigns and sales training. Theyare also required to pass the relevant licensing examinations before they can sellinsurance or provide insurance-related advice.

Banks also make use of their websites to sell personal lines products, such as CardProtection Insurance, Household Insurance, Private Motor Car Insurance and TravelInsurance. Some banks even offer travel insurance products through their ATM networks.

Online Internet Portals

Company Portals

The growth of information on the Internet has also increased the amount of time peoplespend on it. This has in turn generated a new market for online offering of insurance

products.

In recent years, Singapore has seen the entry of direct-to-consumer insurance companiesselling individual motor, travel, home and accident insurance. Its business model entailsdirect underwriting via an online platform, supported by a fully staffed contract centre(operating 24 hours every day of the week) and a full-fledged claims department.

In Singapore, online insurance selling is limited mostly to personal lines productscovering home, motor, golf, travel, card protection, personal accident, hospital incomeand even domestic maid packages. General insurers involved will sell these individual

products through their own informative websites, which can provide for quotations andaccessibility to web brochures, proposal forms and policy wording.

Independent Portals


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Apart from the individual companys portals, there are also independent portals. Theseare deemed "passive" in nature, i.e. they are clearly not involved in any sales distributionfunctions, and need not register with the ARB of the GIA.

Passive portals are not involved in any sales distribution functions, namely:

They do not provide sales or product advice, but provide static product informationof the respective insurers without comments on product features, including

premiums not being deemed as providing product advice; They are not involved in the collection of premiums and proposals; They do not issue policy documents on behalf of insurers;. The fees must not be based on the premiums.

Note: The remuneration fee for such online transactions must not in any way be tied tothe premiums of the products being sold. If a fee based on premiums is paid, this will bedeemed as sales commission and will be seen as being involved in the sales distribution

process.

Portals not meeting the above-mentioned criteria will be deemed as insuranceintermediaries by MAS. Such portals have to be registered with the ARB as agents, orlicensed as brokers by MAS.

Direct Marketing

Rapid technological advancements have changed the way in which individual insurancecompanies can now serve their customers. At the same time, new technology has allowedfor more information on individual policyholders, which enables their buying habits to bestored in the IT systems of direct insurers. The build-up of such databases over the yearsis a useful marketing tool to harness the power of information technology by the insurers.They can then execute segment marketing to focus on customised products for nichetarget groups.

Insurers have directly marketed personal lines, such as Personal Accident Insurance,Travel Insurance, Private Motor Insurance, Household Insurance, Hospital IncomeInsurance, Golfers Insurance and even Domestic Maid Package Insurance, through their

informative websites. Intending insureds self-declare their pertinent information in thesimplified online proposal forms. Insurance product quotations and policy wording aremade available online. Payment of premiums is instant, made easy through online

payment via credit cards.

Insurers also periodically send out promotional product brochures (direct mailers) toexisting policyholders without servicing agents. Telemarketers from call centres ownedor appointed by insurers also phone customers to advise and market personal lines, as


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well as help to file claims. Insurers also embark on cross-selling strategies to serve theneeds of their customers.

OVERVIEW OF DISTRIBUTION CHANNELS:-

Distribution channel is the chain of businesses or intermediaries through which a good or

service passess until it reaches the end consumers .the distribution channel can include a

whole seller ,retailers,distributors and even the internet . channels are broken into direct

and indirect forms ,with adirect channels allowing the consumers to buy the goods

and services from the company and an indirect channels allowing the customer to buy

the goods/services from an intermediary .direct channels are considered shorter than

indirect ones. Traditionally ,tied agents have been the primary channels for insurancedistribution in the Indian markets . The public sector insurance companies have their

branches in almost all part of the country nd have attracted local peoples to become their

agents .The agents are from various segments of the society and collectively cover the

entire spectrum of society .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 . however ,the customer trusted

the agents and company . this arrangement worked adequately in the absence of

competition . agents continue to dominate as the prime channel for insurance distribution

in india . the other distribution channels adopted by the insurers in india are:-

Corporate agents ,bancassurance ,brokers ,microinsurance ,worksite marketing ,direct

internet marketing ,telcassurance , shopassrurance . almost all the new players follow the

agency channel .the belief that all these channels will grow and seamlessly integrate to

bring in business seems a fallacy .though new players are coming in and global marketing

practices and ideas are being tested .

Why channels ?

Insurance is never bought and needs to be sold ,is a cliche often heard . but atrue one and

hence ,the need for the distribution channel .even if the products are loaded with features

to suit the market very competitively priced abd followed by outstanding post sales

service ,without an efficient distribution channel .who directly deals with the market is

not possible .


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The reasons for occupying the pride in te marketing plan of an insurance company

,charaterised traits of an efficient channels partner :

1. Someone who the prospect/customer trusts2. Someone who is knowledgable3. Someone who believes in the supremacy of the prospects/customers .

Before the indian insurance market opened to the private players ,essentially the

development officersemployees of the public sector insurance companies were the key

[marketing persons ,reaching out to the market .but the products and pricing were almost

similar for all state owned insurers and a customer had no choice .the reach to the market

of such a plan is restricted and the cost is very high ,particularly under the current detarrif

pricing ,however such employees marketing personnel is effective probably in a niche

segment .

The need of the intermediaries arises out of the very nature of the general insurance

product

1. Intangible2. Complex wordings3. Legal document

Distribution channels function as arteries in a marketing network that delivers goods and

services to consumers .today distribution is increasingly seen as one of the key marketing

variables ,capable of providing significant competitive advantage ,particularly in te

service sector where consumer,technological ,and regulatory trends have increased

competitive pressures markedly. The new era of insurance development in india has seen

the entry of innovative products ,distribution channels and the raising of supervison

standards ,intensified competition ,rising agent costs and product transformation have

driven insurers to seek more efficient more efficient approaches to operate in the market .


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Review of literature


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REVIEW OF LITERATURE :

A.The choice of channels is ultimately a fuction of two issueswhat the insurer wantsand expects to achieve through the channel and how much it is prepared to expend for

the purpose .typically in the marketing literature ,this has been examined with the

regard of 4 parameters that have been critical in assessing the efficacy of the channel :

1. Costby cost ,we mean the extent of financial resources and time that has to beexpended on a given channel .A channel would be considered cost effective if it

could reach a larger number of people speedily with least experience .the

traditional approach to selling insurance to selling life insurance in india was

through the commission agentit still remains the predominant channel as far as

LIC of India is concerned .with the entry of other new players focus shifted to

other channels .in particular the bank channel ,with its wide reach to customer of

the bank ,has been seen to be a preferred alternative to the agency channel.

2. CONTROL It refers to the extent of influence ,which the life insurer would beable to wield on the channel. When an insurer uses an independent intermediary

,like a broker or an institiution like a bank ,to sell its products ,it bears a risk that

the customers loyality would be to the intermediary rather than the insurer .again

,the employees and managers of a bank or other financial institution may haveother priorities and targets and may not be amendable to doing what the life insurer

wants .it is obviously rather difficult to develop a marketing strategy which is

solely or largely dependent on the performance of another institution .

3. COMPLEXITY :- complexity can arise in two ways .firstly, there is the difficultyin understanding what the product is and does ,what the charges are ,and how it

compares vis- a-vis others .secondly,the customer has to be convinced about how

the product would actually match with his or her needs and what value outcome itwould result into .the more the complex and intricate the product ,the more it

would call for professional consultative selling and financial advice .

4. Customer outcome The final clincher on marketing channel decisions isprovided by the customer outcomes that the life insurer seeks to achieve through


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their deployment .there are two issues that are to be resolved here(a).what is the

nature of relation ,which the company wishes to establish with its customers and

secondly ,what is the role that it envisaged for the channel in this regard . This also

depends on the type of customer the company has targeted .

SOURCE. :-IRDA JOURNALS

B.STATE OF DISTRIBUTION CHANNELS IN INDIA :-Insurance industry in india is no longer the sole domain of agent advisors .insurers are

using all the distribution channels to improve their premium income and market share .

Bank promoted insurance companies are naturally using bancassurance as the mostpreffred distribution channel. Other insurers are using tied agency force the most

followed by alternate channels like bancassurance ,brokers,direct marketing and referrals

,insurers are hardly having any channel specific product ,i.e they al are using possible

channels to send all their products . all said and done ,their 79% business comes from tied

agency channels .

Whatever progress this industry has been able to make so far ,owes a lot to the brand

value of LIC .people of all customer segment have a reasonable trust on this orgnisation

.This trust has been built not just because of efficiency and integrity shown by itsemployees ,but also because of a section of agents ,by way of providing great services to

the customers and also by maintaining a harmonious relationship with the customers

.These full time agents worked patiently and diligently for years ,before reaching a

position of eminence .In insurance salesmanship one cannot become famous overnight

like rocket singh .Here ,selling based on needs.and then post sales servicing .

C.INDEPENDENT DISTRIBUTION CHANNELS :-Independent distribution is the leading sales channel for many core industry products.Today it accounts for more than half of the life insurance written and two-thirds ofannuity business written. In the independent realm, advisors are actively screening carrier

partners, while independent distribution networks (IMOs and BGAs, for example) havebecome central to distribution strategy.


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The independent distribution networks now play a critical role in the competition forsales talent and market share and today more independent advisors prefer to place their

business through an intermediary as opposed to placing it directly with a carrier. Withmuch of the business now written through independent channels, and with industryconsolidation creating large mega-distributors and distribution networks, theseorganizations now have significant leverage among manufacturers. In an effort to

differentiate themselves, these independent organizations have gone beyond thetraditional mix of servicesto providing other value-added support such as advancedmarketing attorneys and marketing services.

Further, these independent distribution networks will seek new sources of revenue, whichlikely will lead them to expand into new markets, offer new services, or tap into newsales channels. Carriers must decide what value proposition, beyond product, they will

provide to these organizations in order to have a seat at the table. These trends raise thequestion of how far carriers need to go in providing services to these increasinglyvertically integrated marketing organizations. As supported in LIMRAs 2012 TurningPointresearch, for both the independent organizations and the carriers, key to their futuresuccess will be having a clear strategy for differentiation and executing it well.

http://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-

Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-

Insurance-and-Other-Financial-Services-Products.aspx.

D.MULTI DISRIBUTION CHANNELS :-The Indian life insurance sector is evolving and growing substantially and is one of the

key drivers of Indias economy. The Indian insurance sector is moving rapidly towards

international standards with new and innovative product offerings. With rising income

levels, customers are demanding more sophisticated risk solutions. Life insurance was

once purchased primarily as a tax-saving tool. A paradigm shift in regulation led to morecustomized solutions. The number of insurance holders has more than doubled to 5.32

crore policy holders in five years to 2010, with the total life insurance premium tripling to

Rs 2.65 trillion during the same period. have a deep, actionable and detailed analysis of

the end users or target segments, so the distribution channel can be set up to reach the

segment effectively. Inefficient customer segmentatio n and targeting actually ends up
http://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspxhttp://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspxhttp://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspxhttp://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspxhttp://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspxhttp://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspxhttp://www.soa.org/News-and-Publications/Newsletters/NewsDirect/2013/may/The-Changing-Face-of-Distribution--Recent-Developments-in-Face-to-Face-Distribution-of-Insurance-and-Other-Financial-Services-Products.aspx


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delivering less value to the customer and hence to the insurance company also. This

whitepape r explores the need to develop an effective multi-channel distribution strategy

that meets customer demands and delivers differentiating customer experience. Emerging

Trends In the last few years we have seen unprecedented growth in the choice of

channels that customers can use to interact with the business. Insurers are now adopting a

multi-channel distribution The Indian customer is offered innovative solutions thatcombine strateg y protection and long-ter m wealth creation. Improved services ,

demographics of insurance buyers, Insurance companies are also sound advice and

innovative products are provided through a using multiple types of distribution systems.

Based on the needs range of distribution channels such as banks, agents, direct offices

and status of target customer segment distribution systems are and online platforms. The

emergence of a more diversified and chosen. A combination of all or most of the

following distribution multichannel distribution network has revolutionized the insurance

channels make it a multi-channel strategy: sector, with increased access and better serviceto customers. Broker to drive operationa l efficienc y. With changin g Individual

Agents Apart from the conventional ways of marketing an insurance policy, which

include brokers, agents, kiosks, worksite marketing and direct marketing, insurance

companies now explore new avenues Corporate Agents Micro-Insurance

Bancassurance Cell Phone/PDA of innovative and attractive range of distribution

techniques that Kiosks can be exploited to their advantage. Today, an insurance

company Internet leverages multiple channels for distributing its services to target E-

commerce customer segments. Work Site Marketing Direct Marketing Internet

Distribution channels not only affect the top line and bottom line of a company but also

raise concerns on the cost management of the firm. In this fluid environment, an

insurance company needs to Digital TV/Satellite Selling Supermarkets and other retail

outlets Affinity Channels and Groups Insurance specific debit/credit cards Call

Centers 3

http://www.slideshare.net/NIITTechnologies/multi-channel-distribution-in-

insurance?from_search=5
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E. FUTURE CHALLENGES :-Effective analysis of distribution channel effectiveness requires assessment, solutions

design, implementation and performance monitoring.

Determine whether the problem or opportunity is at the agent or management level. If it

is at the agent level, then look at compensation and market alignment and training; if it is

at the management level, look at performance measurement and expectations.

Depending on the assessment, solutions appropriate for the problem or opportunity must

be structured.

This may mean redesigning compensation, refining agent selection methods, identifying

markets and matching agents to those markets, and/or improving sales, or product

training. At the organisation level, the solution may mean redefining agents jobs, or

organising appropriate branch-level support structures for sale administration.

Finally, once a solution is devised, the company must implement changes and develop

new measurement tools to monitor the ongoing performance of the sales force and toidentify future potential problems.

http://www.langmead.com/insurance/Q107/10096feature3.htm

F. INSURANCE TREND:-The main distribution channels in lifeinsurance are the traditional individualagency channel, corporate agency(banksand others), broking channel and direct selling (which includes online selling). From an industry perspective, itis an agency-dominated business with 90% of the total premium being sourced from the agency channel. This trend isprimarily a result of LICs agency dominated (at 98% of business) business model. Private sector insurers have a more

balanced channel distribution, with agenciescontributing 47%, banks contributing 33%, corporate agents 9%, brokers 5% and direct sales 6%.


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OBJECTIVE

ANDSCOPE OF STUDY


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3.OBJECTIVE OF THE STUDY :a.To study all the distribution channels available.b.To examine opportunities and challenges faced by the

various distribution channels.

4.SCOPE OF THE STUDY :a. The members of various distribution channels are able to

study their future challenges and opportunities .b. Distribution channels are able to service their customer more

efficiently.


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DETAILED ANAYLYSIS

OF

DISTRIBUTIONCHANNELS


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1.AGENTS:An insurance agents plays a role of a communicator ,counsellor and facilitator ,for

insurance products available in the market . An agent is one which has entered into an

agreement with aparticulars insurance company to sell only that companys product for a

particular insurance company ,an agent dedicates his time an services to enhance theprofitability of a particular insurance company .the role of an is also vital ,as they are,

for the reputation of the company are responsible for the work and they also have their

obligations to their customers .

The agents are from various segments of the society .a person who has lived in locality

from many years ,sells the product of the insurance company with a local branch .this

ensures the last mile touchpoint being closer to the customer .

An Agent is the only point of contact between customer and insuranceand is expected tobe fair and ethical while selling a policy . in terms of coverage ,individual agents have

their limitation according to their skill ,experience and productivity .in the present

scenario ,lack of adequate knowledge of the competitive comparison with the

competitors product has posed challenges to an agent growth and coverage .due to

inadequate of the products agents sometimes mis-sell insurance products to sustain

themselves.

But in handling the product complexity and control ,an efficient agent scores over the

other distribution channels .in case of any complex product ,agents who usually have anyone relationships with their respective clients often efficiently dedicate their .as agents

are dedicated to one insurer they can be properly be managed and trained .

Agents are affected by social function in the market is the considerable respect for age in

Indian society and the belief that an elderly person who knows better. a very young

market by means of which they may not be able to buy insurance to a large segment of

the middle class that appeal to a solid trustworthy looking person,.


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Agency distribution model plays important role as it maintains good relationshipwith the customers ,by providing pre-sales and post sales services to customers .it

is an atrctive model as it is cost effective and helps to convince the customer to buy

insurance covers with personal attention .however the agency distribution model

needs to update with the latest technology .nowadays ,insurance companies finding

difficult to manage and retain the skilled agents .

In the Indian context :- to cater the market insurers are also recruiting some retiredgovernment employees (VRS from banks ) to sell some lines of product such as

pension plans ,annuities etc.

Gender of agents also plays an important role specially in rural context that makesdifference ,especially for the female population .womwn to whom the customer

can relate eg nurses ,gram sevikaascan target the female segment moreeffectively .some companies have also adopted a version of this strategy by

appointing gram sahayaks to sell and service the rural customers.

The corporate agency channels which is the key distribution channels for insurancecompany is now getting out of favor of life insurers .This distribution channel is

loosing out preference due to stringent licensing norms and new persistency

guidelines .

Insurance company has to develop an alternative channel, who can replacecorporate agents not completely at least partially .


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2. DIRECT SELLING :-

Direct selling occurs when insurance company insurance company directlyconnects with their prospective or actual client .This can be done through different

modes using a direct sales force ,catalogs ,website ,email ,direct mail

,telemarketing ,seminars ,trade shows and other one-to one techniques, tocommunicate and sell to their customers and clients .however in india sales

through internet,phone or mail are not significant in india .

With the growing popularity of internet in the Indian household the popularity ofthis distribution channel is consistently rising .direct selling through direct

marketing staff of insurance has contributed to about 23.80% in the total number of

policies sold in 2011-2012.

The internet makes direct marketing more easier ,more targeted ,more flexiblemore responsive ,more affordable and potentially more profitable than ever.

The ability to reduce the transaction cost of interaction between buyers and sellers,has always been ackowleged as a central motivation for the use of web .

Due to cost advantage , insurance companies may provide a price differential totheir direct customers. This distribution channel has advantage over cost and contol

over other channels.

Direct marketing creates face to face communication ,builds cordial relationshipbetween insurer and insured .

Internet facility has helped to make an interactive system can make it possible forlikely customers to feed in basic information about quotations from different

companies ,before they make choices.

But, considering product complexity it may turn out as a worst performing channelas for a complex understanding trust may be build up only via one to one

correspondence .

However in india mobile phone ,internet ,news papersetc . still have a lowcoverage on a pan India basis due to their inassesibilty as well as unawareness and

distrust for virtual media to the common people in india .


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CHALLENGES IN ONLINE DISTRIBUTION :-

1. product innovation: Since the products bare sold through traditional channel notblend well online too, it becomes that companies innovate and design specificproducts for sales. This again involves a cost companies may find it a bigger toinvest in product innovation. products that can be clearly by the potential customer

on visit to website is the need of the hour. It is observed that the complexity of theproduct many a times has been a major hurdle in converting a potential sale intoactual one.

2. Transparency: The pricing of the product on this channel would be moretransparent than those in the traditional channels. The companies therefore, mustalways keep their prices competitive and updated to the market changes andrequirements.

3. Security: As more and more transactions take place online, one of the importantconcerns that customers would face would be the security of their personal data.The companies would require to make investments in ensuring the data securityand keep upgrading the same from time to time. The customers would expectrobust and sturdy online transaction safety architectures for the security of theirtransactions. Since this involves a cost to the companies, they would weigh itagainst the present and expected sales. This may result in loss of potentialcustomers on account of insufficient data security.

4. Positioning/segmentation: Normally, it is expected that the younger populationand those owning a mobile phone or having an internet connection would beappropriate segment for selling insurance through direct mode. However, one mustrecall that those who aspire to own a mobile and those who have remote access tointernet also can be the segment that can be targeted by companies. Rural segmentswhich are very price sensitive and have problems of inaccessibility can bemarketed insurance through this channel. The online model proffers suchindividuals the twin reward of cost saving Even if they dont own an internetaccess, they can well be made aware of the nearest center where they can beprovided access. and convenience. Even if they dont own an internet access, they

can well be made aware of the nearest center where they can be provided access;

the positioning however should be price advantage that they would derive. Onlinechannel must be positioned as easy, safe and affordable. Train specific people to

propagate and utilize the online mode, who can assist those who are notcomfortable using the system on their own. This would bring in a culture of onlineusage over a period of time.


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5. Pricing: Since there would be no commission involved in direct sales, there wouldbe an expectation among the customers that the benefit would be passed on tothem. Moreover, price comparisons become quicker and faster and the companiesneed to keep it at par with the market standards lest they lose out on the customers.The pricing must also be simple for the customer to understand.Virtual Interaction: Among others, one reason as to why agents are the most

preferred channel in India is because there is a personalized interaction and one toone relationship that is created between the insured and the agent. This does notexist through online mode; with the advancement of technology, a virtualinteraction can be created which would be more personalized and a call center thatwould be readily available to assist the customer in case of any queries in the

process, may create additional demand for this channel. This would enable andconvert the entire exercise of buying an insurance product wholesome andfulfilling to the customer.


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Brokers:-

brokers are not tied to any one insurer and are facilated to present as many options as

possible to clients brokers have unique advantages as they can combine the life ,non-life

and health insurance requirements of a client .the positives are that the broker in the

urban arena can do wellwiththe elite and upper middle class customer .this feature

allows brokers to work with relatively smaller companies in a cost effective manner as

individual insurers and agents would not have the same in serving the small clients .

A broker can also look across all related companies to pick the right option as bin that

brokers are constantly exposed to people and product offerings of different companies

.brokers also update themselves via training programmes conducted by different

companies for proper understanding of market and developments .

Brokers are influenced by the bargaining power of companies and can have a bias

approach towards a particular company .

In vast majority of cases , abroker compensation comes in the form of a commission as a

percentage of the insurance premium creating a conflict of interest in that brokers

fianancial interest is titled towards encouraging an insured to purchase more insurance

than required at a higher price.


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Challenges:

Insurance brokers need to continue upping the ante to set yourself apart from thecompetition and the increasing tendency of the players directly in the course of the manychanges in the industry in recent years .

meet the needs of their customers in the currentconsumer -oriented environment focused on compliance.

It requires specific skills , transparency and professional advice , the back- bendingpressure on brokers separation value added operations of those whose service accesses isset too short.

expected to grow as consumers seek to continue a better price options . To counteractthis, will need brokers to prove their worth and avoid the bad press to produce directinsurer for them to stay in business and grow their market share.

-to -face interaction and more about convenience and

advice. It is necessary for brokers to to improve their technology and computer skillsinformation not only about the products but also to manage their customer relationships.

Consumers are easier, faster and more effective Search Help amending Directives and

communication


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Worksite Marketing

Work site marketing is an innovative channel to distribute insurance products at workplaces. This channel is not in practice in India. But it is already popular in US, UK,Australia, Netherland and South Africa. Work site marketing works with the mutualunderstanding of insurers and employers. The co-operation of employer is essential forthe success of worksite marketing. Of course, worksite marketing is a complex process. It

involves the process that begins with educating the individual employees on the insuranceproducts, then selling and administering those products. The main product is pension, andin addition Health care products, Risk cover simple products and General0020insurance

products can also be sold. There is a huge growth potential for worksite marketing inIndia. There are many employees working in factories, companies and other departmentswith uncovered or underserved insurance. Pension plans and other risk cover plans can besold with the co-operation of employers. Generally, premiums are paid through theemployer by salary deduction method. Regulators and the insurance companies in Indiashould plan for adopting worksite marketing as a distribution channel.

In South Africa, worksite marketing is largely driven by trade unions and in Australia,there is an obligation on the part of employers to provide retirement benefits to his or heremployees, which is made to boost work site marketing. Therefore, it can be said thatwork site marketing is a win- win model. It is advantageous to employees, employers andinsurers.

Benefits to employers: Helps to attract better employees by offering greater fringe benefits

Reduces staff turnover

Improves productivity Creates long term goodwill Cost effective

Benefits to employees:

Supplements existing fringe benefits Convenient, pay roll deductions

Enjoy group discount rates

Risk coverage can be extended to spouse and children Greater financial security


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Benefits to insurers: Promotes insurance business

Profitable as the chances of lapsation of policies becomes very less brings platform to provide better services to employees and customers

attracts new customers

BANCASSURANCE :-

Bancassurance broadly refers to the collaboration between banks and insurers,to

distribute insurance products to the same clientele or same client base.bancassurance is

sen as an emerging and important distribution channel globally and has risen in arelatively short time due to its benefits over other channel ,in terms of operational cost

and effectiveness due to wide consumer network .

The success of banca as a distribution model very much depends upon the degree of

integrity .distribution agreements are merely associated with distributing an insurance

product .while joint ventures mutually share their product as well as customer .need for

clarity on the operational activity of the banc assurance

i

ie, who will do the branding, if the insurance company pulls to put a person in thebranch bank or the bank branch train and put one of their own etc. should be carefully

defined

besides this in case of direct compensation to conventional banking products ,banks Staff

may sell insurance products resistant to.

most large retail banks build a great deal of trust with broad segments of consumers.


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Challenges of Bancassurance:

The disadvantages associated with bancassurance are as follows:

Economic viability of banks since bancassurance is a volume based business Training people and the lack of vision and awareness Useful for certain lines of productsNot suitable for non-life insurance Initial investment in systems and processes and people in training

India being one of the most populous countries in the world with a huge potential for

insurance companies ,has an envious chain of bank branches as the lifeline of its

financial system .banks with over 65000 branches and 65% of household investment are

the backbone of the Indian financial market


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BANCASSURANCE

o The main reason may be the complementary nature of life insurance and banking

products. Bank employees are already familiar with financial products and quickly adapt

to the sale of insurance -based savings or pension products .

On the other hand , the non-life market requires special management and sales skills

that are not widely used in the bancassurance necessarily . In addition , such skills require

significant investment in training and motivation , and therefore additional costs.

Life insurance products are generally long -term products that customers need to ensure

full confidence in the institution that invests their money and , as we know , the banks

have a better picture and more confidence than the insurance companies.

Bank Consultant Can use knowledge about their customers to target their finances

advice on specific needs. This is a great advantage in life insurance and less important in

Personal insurance .

Some professionals in the claims management aspect of personal insurance , which

could have a negative impact on the brand image , referred to. This seems to explain why

for a long time hesitated bancassurance operators , this type of product .


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Benefits to the insurance company :

Basic advantage through bancassurance , the insurance company significantly expanded

its customer base and provides access to customers that were previously difficult to

achieve , and even enough to convince an insurance company to ally with a bank;

The insurance company to make its distribution methods and procedures has varied toavoid over- dependence on a single network. Diversification reduces the risk ;

The insurance company often benefits from the trusted and reliable picture , people are

more likely attributable to banks ;

The insurance company also benefits from the reduction in selling expenses in relation

to the cost , which is usually the same for banking products and insurance products. In

traditional sales representatives, because the distribution network is This means that the

products are sold for less .

Advantages for the bank:

First, a bank sees bancassurance as an opportunity to create a new stream of income and

diversification of business activities. Since 1990 , a period which , it is through increased

competition between financial institutions and reduction in the profit of the banks to find

the margins that drives the need for new business look .

The bank becomes a kind of "supermarket" or " one-stop - shop" for financial services,

in which all customer needs - whether financial or insurance -related - can be met . The

broadening of the product range makes the bank more attractive and can strengthen

customer satisfaction and customer loyalty.

Distribution costs can be seen as marginal because , in most cases, it is the bank'sexisting employees who sell insurance products . Among other things, the one-stop - shop

model optimizes the use of the network and increases the profitability of the existing

store network .


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Benefits for the consumer:

As mentioned in the benefits for the bank , the consumer enjoys better access to all

financial services from a bank that offers both banking and insurance products :

Since the distribution costs are lower than in a traditional distribution network of

consumers can generally cheaper than insurance products through traditional channels .

In addition, premium payment methods Club Fanned because premiums are collected

directly from the bank account .

The special relationship between the customer and the bank means that it provided abetter match between the wha the needs of customers and solutior of the Bank.

Benefits for legislators :

The role of the regulatory authorities or the government itself, to make laws to ensure that

the risks are taken by the financial institutions of the country and actively managed in a

way to keep public finances sound controlled. However, events may occur that are

beyond the control of individual and national managers that can affect the entire financial

system. These risks going under the name of " systemic risk " .

For financial institutions Bancassurance can be a means to limit such system. :

risk , because it is the Bank diversified sources of income , so that the business stable and

thus safer for its customers . On the other hand, certain authorities may think that the

deregulation of financial systems in order to increase surplus to systemic risks of a

country. That is why in many countries , banks are still not


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Opportunities:-

:

ChallenQes in the distribution of insurance Mirco Droducts :

As is the case with another insurance product in Micro- insurance , there are majorchallenges that are seen in the development and distribution of suchMikroversicherungsproduktezu :

a) Infrastructure: Due to the nature of the low premium products, it can not physically beviable for the insurance company have their own offices to cater to this population in

rural India . As such, an alternative distribution mechanism that has a long- termprospective and controlled well adjusted systems and procedures

Manage premium collection and maintenance is required.

b ) Medical Network : Building a Medical Network in this area is another challenge ,which then restricts the development of certain types of products that the rural population, which could require medical examination may be offered either before or

Transmission output .

c ) Manpower : The quality of the workforce in rural India is little knowledge andexperience of the sales of these products. Second, the rural markets are not a preferredlocation for the employment of the youth of today .

d ) Technology: This is another limiting factor , and a challenge in maintenance. Thetechnology factor is a huge obstacle in the remote control for the underwriting and

pressure of policy documents.


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e) Actuarial restriction : Lack of accuracy of mortality data available and the accuracy oflapsation data is another major challenge in this segment.

f) Awareness: Low awareness of life insurance itself and specifically its products ( the

term and duration of the return premium) is a major challenge in the segment. Lowliteracy rate to mislead products or distribution channels (multi -level marketing , where

people have lost money ) have created a negative feeling towards such products.

g) Fraud Management : misselling of products and in the absence of structural collectingmechanism , misappropriation of premium collection is another challenge that confrontsthe insurance company.

h) Training: Logistical obstacles in the implementation of training program in rural areasand especially in the local language , is another challenge that needs to be done.

i) Product Design : With the kind of population in rural India , with seasonal / irregularincome , the design of the products is a major challenge. The company must at leastenable transaction costs , the factors that contribute to difficulties in controlling the moral

dangers of reaching the minimum turnover Despite the limited data and skills foractuarial analysis of insurance and reinsurance. is a challenge.

It's a win -win situation for everyone involved - the customer , the bank and the insurer insuch a tie on .

a) for the customer : Easy, inexpensive, are customer-friendly products through thebanking channel , the maintenance of the pre-sale , sale and after sale services rather than

made . This is very convenient for the customers, especially in the rural market .

b) For the Bank: An excellent opportunity for cross- selling or up-selling is veryconvenient for the customer loyalty and get a bigger pie of the wallet. It is also a greattool to not deserve - Interest income for the rural market where such options are verylimited .


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C) For insurers : Helps to use the large branch network of the Bank , to dig deeper intorural pocket in the most cost effective manner and the use on the strength and brand valueof the bank .

New emerging distribution models: -

Potential distribution channels

1.Direct Marketing

Direct marketing in the past, especially in the form of direct mailing of banks, made totheir account holders , marketing insurance products through their allied life insurance

available. However, only the insurers were entitled to sell these products . As banks andbrokers now allows life business to sell directly , these types of direct mail are likely toincrease. Moreover, as the range of products available , the sales are contributed toexpanding direct mailing likely to increase. At the same time , spending on advertising byinsurers have also grown significantly , as insurers try to attract the attention of the publicon a wide range of products and services , as well as educate them about the benefits oflife insurance and in particular the protection type - Products .

Second E -commerce

The Internet has not for the insurers a major source of distribution. The population ofover one billion in India were estimated around 9.5 million people , be Internet users .Some life insurers have a site where the services are provided to mainly access to productinformation and rate quotes , etc. are restricted Nevertheless , premium payments can bemade by credit card, internet, e - " design are made transfer, direct debit and bankers , andthis should allow insurers to better develop an e- strategy.

3rd bancassurance

Bancassurance will emerge as an important new way of distribution of insurance in India." The Reserve Bank , in recognition of the symbiotic relationship between banking and


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insurance industry , has three ways of participation of the banks identified in theinsurance business

(i) providing fee-based insurance services without risk participation,

( ii ) investing in an insurance company for the provision of infrastructure and services

support

( iii ) establishment of a separate joint venture company with Risk Insurance

Participation. "

4. Networks and Decentralization

Online insurance sales are growing. Online sales of insurance products continue to grow.Each year, more customers obtain quotes, for and even purchase, coverage over theInternet. A 2007 study by international strategy consultancy Celent predicts that by 2011nearly 30 percent of auto insurance sales will take place on the Web. In 2007,

Network/partnership models are flourishing. The opportunity to greatly expand thedistribution channel and reach new customers through bancassurance is enormous.

5. Mobile phone technology:

Access to high-speed networks remains unequally distributed around the world, althoughsome emerging markets are leapfrogging over legacy infrastructure and moving straightinto mobile and wireless technology. In South Africa, insurers are issuing micro-insurance life policies to low-income customers whose premiums are attached to theircellular phone bills. Insurance customers in India may stay in touch with insurers throughtext messages that deliver policy information and updates to their phones.

6. Radio-frequency identification(RFID) Developments in tracking technologies offera more accurate method of assessing and minimizing risks. RFID chips in automobilesserve as theft deterrents Of the population of over a billion in India around 95 lacs

people were estimated to be Internet users. Some life insurers have a website. in whichthe services are provided, especially for the access to product information and rate quotesetc. limited16. TakafulTakaful is an Islamic insurance concept which is founded on Islamic muamalat (bankingtransactions), observing the rules and regulations of Islamic law. The takaful industry isgrowing at a faster rate than the conventional insurance segment globally by 35 percent,


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and it is increasing in popularity in countries with a sizeable Muslim population such asMalaysia and This fast growing industry offers attractive and affordable products toconsumers, while being religiously and culturally appropriate

21Shoppassurance (Mul ti -Company Service Centr es)Another innovative distribution channel that could be used is the nonfinancialorganizations. The Indian retaii market is the most fragmented in the world and at

present, organized retail channel is around 3% of total retail business. But the organizedsector is expected to grow at a rate of around 30% per annum. With this huge growth rateof the retail sector, it can become a viable distribution channel for life insurance products.In the life segment.group creditor insurance may be the most suitable product for thischannel. However, repeat business or renewal business cannot be assured in this system.Scope of retail business in life insurance is limited as compared to non- life insurance.

.

22. Sell ing Lif e I nsurance through Pharmaceutical Agencies

A simple tie up wth pharmaceutical agencies will help insurers to tap the huge potentialmarket at a very low cost. Pharmaceutical agents can be utilized to sell life insurance

products, through their well bulit network and contacts. The Indian pharmacy market isthe most fragmented in the world and at present, organized pharmacy channel is around6% of total retail pharmacy business. But the organized sector is expected to grow at arate of around 25-35% per annum. This shows a huge growth rate of the retail pharmacy

sector, which can be turned into a viable distribution channel for life insurance products.In the life segment, group creditor insurance may be the most suitable product for thischannel.

23. Sell ing Li fe I nsurance through Anganwadi Workers

This channel will offer a great opportunity to the insurance companies, to meet theirsocial responsibility as well as to secure a strong footing in the rural market. A total of11.71 lakh anganwadi workers including workers of mini-AWC5 and 10.97 lakh AWHsworkers are serving in rural India. The huge untapped market for insurance is the rural

and social sector.

24 .Sel l ing insurance thr ough Electri city Department, Petroleum Gas Agencies, and

Cable/DTH Operators

Insurance companies can tie up with the electricity department, to provide protectionagainst fire insurance, caused by electricity. A small monthly premium can be charged


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along with the electricity bill to cover for the fire insurance. Likewise, a tie up withpetroleum gas agencies by insurers, with a collection of small monthly premiums, canprovide protection against fire caused due to leakage of petroleum gas. Since theseservices are contractual in nature, they offer a good match for selling of insurance

products. Cable and 0TH operators can be used for selling all insurance products.Discussion and Conclusion The insurance marketplace is undergoing a transformation

that may finally lead to significant changes in how consumers purchase insuranceproducts. With about 200 million middle class households, India shows a better potentialfor the insurance industry. A variety of distribution channels


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FINDINGS


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FINDINGS:-

1. Agents are the traditional channels of distribution ,they are having high level ofcontrol ,coverage ,complex product handling capability .on the other hand agents

are having lack of depth of knowledge, experience and comparative skills

regarding competitors product .

2. Agents are facing challenges as due to the presence of stringent licensing normsand persistence guidelines and also the commission to agents are very much

limited .

3. Direct selling is a new channels having different modes of communicating withthe customer it is more flexible ,targeted ,responsive, but it is not suitable in case

of complex products as technicalities cannot be easily understood.

4. Direct selling channels are having problem of network connections as majority ofareas are not having internet facility .

5. In india internet is not so common till date as to develop businesses with directselling channels of distribution.

6. Brokers are the best channel from customers perspective as they help in getting thebest suitable product out of all products offered by the companies .

On the other hand brokers are influenced by the biasness towards one company.


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7. Brokers are the most cost-effective channel due to non-presence of large players inthe industry .

8. Worksite marketing channels are very much suitable from employees point of viewas there is also a huge opportunity of this channel in india .large chunk ofcustomers can be targeted with the help of this channels .

9. Bancassurance model is very much required for the development of insurancesector in india as people are having trust in banks as a financial advisor.

Banks are having the large amount of database with them .

10.Bancassurance requires change in mind of employees of banks in their approach,thinking and work culture on the part of everybody .


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SUGGESTIONS


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Suggestions :-

1. Agents has to know which product will appeal to the customers ,with focusingon competitors product also . new companies are looking for the individuals

with marketing skills .

On the other hand agents are preferred because of the trust they create among

their clients. Hence agents must have to develop a goodwill as to go further.

Agents has to equipped themselves with the latest technologies as to compete

with the other channels of the industry .

New Agents must asked to have training under experienced agents so as their

way of functioning is observed and special guidance can be given .

2. Insurers must focus on direct selling as in todays scenario with no time tospend on buying insurance products from other channels there is huge scope of

this channel.

Youth and High networth individuals are more computer savvy can be directly

focussed through internet.

Insurers made this channel by giving customera user friendly interface as this

channels has potential to service customers pre, post sales querries online in a

efficient and effective manner .

3. Brokers must provide customer need based products .


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CONCLUSION


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CONCLUSION :-

The insurance distribution is undergoing a transformation that may finally

lead to significant changes in how consumers purchase insurance products .The company that survives is one who sticks to its strategy ,adjusting it when

required and constantly innovating its offering and reach to suit the customer

changing requirement .

Better channel management is likely to improve channel performance in the

long run .it therefore makes sense to look at well balanced ,alternate channels

,bancassurance,teleassurance,shopassurance etc.

The relationship between the fast moving people and technology is

empowering the next generation .

Its the distributor who makes the differences in terms of after sales and claim

settlement .

Insurers need to be aware of the risk in the structuring of their distribution

through alternate channels because ultimately ,they dont control the acces to

the customer. Insurers need to positioned with multi-channel stragies and

products to capitalize on the opportunities.


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BIBLIOGRAPHY


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1. http://www.ey.com/IN/en/Industries/Financial-Services/Insurance/Indias-insurance-industry-issues-and-challenges

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_challenges_reforms_and_realignment/$FILE/EY-Insurance-industry-challenges-reforms-

realignment.pdf

4. https://www.genevaassociation.org/media/238894/ga2002_gp27%283%29_benoist.pdf

5. http://connection.ebscohost.com/c/articles/87005074/driving-microinsurance-through-bancassurance6. http://www.cifplearning.com/Insurance%20distribution%20models%20of%20the%20future.pdf

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/Industries/Financial-Services/Insurance/Indias-insurance-industry-issues-and-challenges

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