Expert Zone

Straight from the Specialists

Selling insurance through kirana stores


(The views expressed in this column are the author’s own and do not represent those of Reuters)

India is considered to be a large untapped market for insurance products. There seems to be enough scope for improvement on the insurance density and insurance penetration counts for the country. While this is true, the challenge lies in reaching out to the large population in the rural areas where the traditional financial distribution channels just don’t make economic sense.

The traditional insurance products would also not make sense in these areas as the requirements would be very different from what a tier 1 or tier 2 city would need. After selling, the ability to service these customers too would form a crucial part of the link to increase these numbers.

These plans are called micro insurance plans and are specially meant for the rural areas to meet their requirements. The insurance regulator has analysed the performance of these plans and the distribution network and made some suggestions to improve the sales of these products. Currently NGOs, SHGs and MFIs form a majority of the micro insurance agents, but it was found that most of the little business that was done by the agents was being done through NGOs. It is felt that the insurance industry has not tapped into them well enough to increase sales of these products.

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