IRDA seriously looking at Bancassurance model to sell policies
Mumbai: IRDA wants to implement bancassurance model for selling insurance policies as the IRDA Chairman feels that the agency model of selling policies has major shortcomings according to a report published by Mint.
J. Hari Narayan, Chairman, IRDA, reportedly backed his point by explaining that insurance companies can easily penetrate into the rural market by tying up with banks as most of them are already present in these places.
“We can leverage the vast infrastructure of the banking sector in a manner which promotes consumer interest. Of the 80,000 odd bank branches in India, around 15-18% sells only one policy,” said Narayan on the sidelines of FICCI National Conference on Insurance.
He is also said to have added, “Agency in the traditional form has vanished in many markets in the world and I don’t see why India will be an exception to this.”
The regulator had set up a committee in 2009 to examine whether banks could be allowed to sell policies of more than one life and general insurer. The report of the committee is still awaited.
The IRDA Chairman said that the agency channel is no longer considered as a lucrative business. He also indicated that the regulator may be willing to alter renewal commission structures once it is empowered to do so after the insurance amendment Bill gets passed by Parliament.