Nilesh Sathe, Member – Life, IRDAI has said that online distribution channels like web aggregators and insurance self-network platforms will not be a threat for the brick and mortar agents. He was speaking at a recent event held in Mumbai.
Sathe said that while online distribution channel may grow in future, it will not undermine the importance of individual agents. He said that policyholders need handholding to buy insurance policies. Individual agents are the touch points for policyholders, he said.
Sathe further said that many life insurers are concerned about the cost of acquisition of a policyholder through an individual agent. However, only individual agents can bring in persistency and sustainable profitability for the industry, he added.
“Going forward, the growth in the insurance sector will come from tier II and tier III cities considering the huge untapped market. Life insurers should rethink their distribution strategy and focus on strengthening their agency channel through individual agents. These agents can help tap this opportunity because of their strong relationship with policyholders,” he said.
Last month, IRDAI chairman T S Vijayan said that distributors should be adequately compensated in order to increase insurance penetration. He said that insurance is not something which could be sold online like clothes and mobile phones. He said, “A policyholder needs proper handholding and advice to buy an insurance policy. And who is better than agents. Hence, insurance companies should motivate agents to take insurance distribution as a full-time career.”
