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What are the Distribution Channels for Insurance Products in India?

Insurance industry in India for quite a longer period relied heavily on traditional agency (individual agents) distribution network IRDA (2004). As the insurance sector had been fully monopolized by the public sector organizations for decades, there was slow and uneven growth in the insurance business due to lack of competitive pressure. Therefore, the zeal for discovering new channels of distribution and the destructive marketing strategies were totally absent and to an extent it was not felt necessary. The insurance products, by and large, have been dispensed mainly through the following traditional major channels :

  • Development officers
  • Individual agents
  • Direct sales staff

It was only after IRDA came into reality as the regulator, the other forms of channels, viz., corporate agents including bancassurance, brokers (an independent agent who represents the buyer, rather than the insurance company, and tries to find the buyer the best policy by comparison shopping 2) internet marketing and telemarketing were added on a professional basis in line with the international practice. As the insurance sector is poised for a quick growth, in terms of business as well as number of new entrants tough competition has become inevitable. Consequently, accumulation of new and more number of distribution channels would become necessary.

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