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  • Insurance Individual agents dominate life insurance distribution business

    Individual agents dominate life insurance distribution business

    LIC gets 94% business through agents; banks dominate sales of private life insurers.
    Abhishek Kumar Jan 12, 2022

    Individual agents have maintained their stronghold in the life insurance business. IRDAI data shows that they brought in 58% of the business for life insurers in 2020-2021.  Their contribution in new premium rose from Rs. 3.44 lakh crore to Rs. 3.65 lakh crore.

    Corporate agents, which mostly includes banks, were the second-biggest contributors in new sales with 31% share.

    In life insurance business, different distribution channels dominate the sales of different category of players. While the sole public player LIC derives 94% of its new business through individual agents, private companies get the majority of their new business (55%) from banks.

    Data from IRDAI's annual report 2020-2021 shows that contribution of individual agents in business of private life insurers is 23%, which is much lower compared to that of LIC.

    At the industry level (including both public and private players), individual agents have a share of 58%. Banks are the second-largest contributor at 29%. Direct sales bring 7% of the total new business of life insurers.

    While the sales from other channels is negligible in case if LIC, private players get significant business direct sales, brokers and non-bank corporate agents as well.

    In case of group life insurance, direct channels dominate the sales for both LIC and private players.

     

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