The purpose of distribution channel is to make the right quantity of the right product available at the right place and at the right time. Distribution is supposed to create time, place, and possession utility. A distribution channel is expected to perform the selling function of moving through the stages of awareness, interest, desire and action. Therefore, distribution channels need to be selected very carefully because every product requires a unique and different distributional channel, which in turn is determined, by the skill expertise and the cost base of the chosen distribution method. Appropriate distribution channels are needed through which the insurance companies can get the maximum benefits n serves the customers in manifold ways.
The time has come for the industry to gradually move from traditional individual agents towards new distributional channel with a paradigm shift in creating awareness and not just selling products. The need of the hour is Multi-channel distribution. Many Financial Consultancy Firms, Share Broking Firms, Companies working as Investment advisers have taken up corporate agencies and sell insurance to the existing customers and spread their insurance selling to new customers through the referrals given by their clientele. Another significant thing that is happening is the addition of Banks as corporate agents and marketing insurance through the banks
[...] Another area that could be of interest to bankers to sell insurance is exploiting the corporate customers and tying up for insurance of the employees of corporate clients, which would be an avenue with easy access. In most cases of corporate accounts, banks take up the activity of salary disbursement of employees, and offering personal loan facilities. Here, gives an opportunity to provide insurance cover as well Thus, The Major Opportunities In Bancassurance Can Be Jotted As Follows: 1. Finance and Repayment Products: These products help in covering the loss to the financial Institutes, who grant loans and credit to the individuals, in case of disability or death of the borrower. [...]
[...] The policy is an annually renewable one and terminates on the customer reaching the maximum age. These products are priced very affordably, and therefore, offer pure protection only, and there would be no returns on maturity. Usually, the products have a fixed start date every year, and therefore, those joining in the middle pay proportionate premiums in the first year. Customers receive a certificate of insurance/acknowledgement while the bank is the master policyholder. An attempt has also been made in the industry to provide the popular recurring deposit in the bank with the value addition of life insurance cover. [...]
[...] Such customer bases offer an exciting opportunity of reaching potential life insurance buyers at relatively low cost. The reason is that such customers are already aware of the benefits of savings and would be open to the philosophy of protection that insurance delivers. Depending on the relationship with its clients, it is easier for the bank to influence the insurance purchase decisions of its clients. With the experience of banking with a particular bank for long, customers naturally repose a sense of trust and faith in the bank. [...]
[...] Survey analysis A survey was conducted on about 50 people who did regular banking transactions and also had an insurance policy. These included several housewives, Businessmen, Professionals, Salaried, and Students etc. The following analysis was done on the basis of the survey conducted: Are You Aware Of Bancassurance? Interpretation: Among those who were surveyed were aware that their bank provided bancassurance. They knew with which insurance company, their bank has a tie-up with. There were also aware about the various policies that their bank offers. [...]
[...] Also, an agent would give good after- sales service which would be missing in case of banks. Hence, they would always prefer an agent people said that they would prefer a bank because a bank is trustworthy and also they would receive professional services from banks. Hardly said that they would go to an insurance broker. Which Bank Do You Feel Would Excel In Bancassurance? Rate Them Accordingly. Interpretation : 90% opted for private sector banks, main reason being that they were more aggressive and sales oriented. [...]
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