Open architecture in insurance distribution is yet to gain popularity among insurance agents. This is evident from the fact that only 114 players have set up Insurance Marketing Firm (IMF) since 2015.
IRDAI has issued 100 new IMF licenses this financial year.
This distribution channel has been receiving a tepid response since its inception. IRDAI believes IMFs have not gained momentum among insurance intermediaries due to lack of awareness of this channel. In fact, the insurance regulator has been urging agents to float IMF to grow business.
Recently, at an industry conference, TS Vijayan, Chairman, IRDAI had said, “Due to lack of awareness about insurance marketing firm among distributors, it has not picked up well. We are working on this to increase awareness about IMF. In fact, we recently met senior officials of a few insurance companies to discuss how to popularise insurance marketing firms among agents.”
Seconding this thought Krishnamoorthy Rao, CEO, Future Generali Insurance, added, “Many agents feel that IMFs will limit their growth as they can operate only in a certain geographical area. Also, many agents find it difficult to meet the networth criteria of Rs.10 lakh."
