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Bombarded with insurer calls? Marketers numbers have risen 10-fold

Out of 219 insurance marketing firms, 192 are undertaking back office activities of insurers

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With the financialisation of assets happening at a fast pace, insurance marketing is getting bigger in India. Data with regulator Insurance Regulatory and Development Authority of India (IRDAI) shows the number of registered insurance marketing firms has grown to 219 compared to less than 20 about two years ago. Viewed as a new channel, insurance marketing firms (IMFs) solicit or procure insurance products, and undertake insurance service activities.

Each insurance marketing firm is allowed to tie-up with two life insurers, two non-life (general) insurers, and two health insurers. Many insurance brokers do not prefer to sell insurance to retail customers as it entails heavy marketing expenses and comparatively lower ticket sizes. So, the insurance marketing system is expected to be a better than the tied system of agents. As of April 2018, there was 20.82 lakh individual agents with life insurance companies alone compared to nearly 21.9 lakh four years ago, as per Life Insurance Council data.

At present, there are 18 insurance marketing firms from Mumbai, 14 each from Ahmedabad, Pune and Lucknow, 13 from Hyderabad, eight from Kolkata, seven from Mohali, six from Chandigarh, three-four each from Bangalore, Ghaziabad, Noida, Ernakulam, Chennai, among other major locations. There are quite a few from different parts of Delhi as well.

"We have a six-quarter track record. Business has been good, and our month on month figures have been solid. We broke even quite early and are seeing positive cash flow. We chose the insurance marketing form model because the remuneration structure is pretty fleshed out," said Aparajit Bhattacharya, managing partner, Insure First IMF LLP.

Current norms allow insurance marketing firms besides soliciting or procuring insurance products, to also provide insurance service activities like undertaking back office activities of insurers, become approved person of IR's (Insurance Repository) and undertaking survey and loss assessment work. Out of 219 insurance marketing firms, 192 are undertaking back office activities of insurers.

"The insurance marketing firm model allows intermediaries like ex-industry veterans to recruit other agents and sell insurance in a better way. It is early days, and you can expect insurance marketing headcount to cross 500 in a few years," said the CEO of a private sector life insurer.

With a minimum net worth requirement of Rs 10 lakh and validity of insurance marketing firm registration of three years, it is quite easy for many entities to sell insurance. The most popular life insurers in terms of insurance marketing firm tie-ups include Max Life, LIC, Aviva Life, HDFC Life, ICICI Prudential, PNB Metlife. In the non-life space, there are ICICI Lombard, HDFC Ergo, Bajaj Allianz, National Insurance Company and IFFCO Tokio, while in the health insurance space, the most number of tie-ups seem to be with Apollo Munich, Cigna TTK, Max Bupa, Star Health and Religare Health.

"Over the next few years, insurance marketing firm model will be very big. This is akin to distribution companies having multiple tie-ups with insurers, a model akin to Independent Financial Advisors or IFA. The insurers who will give high clarity on the regulations and have a streamlined registration process and provide dedicated channel support before and after the incubation process will likely emerge as the winners in terms of snapping up good IMFs," said the distribution head of a PSU non-life insurer.

A committee headed by a former chairman of LIC NM Govardhan had recommended IRDAI to develop insurance marketing firm model in order to increase penetration of insurance in the country.

...& ANALYSIS

  • As of April 2018, there were 20.82 lakh individual agents with life insurance companies alone compared to nearly 21.9 lakh four years agoEach insurance marketing firm is allowed to tie-up with two life insurers, two non-life (general) insurers, and two health insurers
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