As a cost-control measure, Aegon Life Insurance Co. Ltd decided to exit its agency channel 3 months ago and focus primarily on its salaried sales force and online channels. In terms of products, it wants to further strengthen its protection-oriented proposition and has launched a new online term plan. K.S. Gopalakrishnan spoke to Mint Money and explained why the company rebooted its distribution. Edited excerpts:
You have exited your agency channel. Given that agency forms the backbone of distribution for non-bank-promoted entities, what led to this decision? What are the alternatives for you?
We had four channels of distribution: salaried sales force which has now become a significant channel for us, third-party channels like brokers and corporate agents, the agency channel and the online channel. We had about 6,000 agents and were running at an expense gap of almost 60% of the premium: if I got a premium of Rs100, we were spending Rs60 more than what we could afford. In comparison, we found our salaried sales force was cost-effective and so we decided to focus on it. The challenge here is to generate leads for them, which is what we will be focussing on. We will create our own digital assets, and online and offline partnerships. We are also keen on bancassurance and are in talks with a few banks.
What about the online channel? Some say there are huge marketing costs involved.
