26 Sep 2019
Direct sales channel set to diminish dominance of brokers and agents in Indian general insurance, says GlobalData
The rise of direct sales channel is set to diminish the traditional dominance of the brokers and agents in the Indian general insurance business over the next three years, according to GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Strategic Market Intelligence: General Insurance in India – Key Trends and Opportunities to 2022’, reveals that the share of direct sales in the total direct written premiums (DWP) will increase from 37% in 2017 to 42% by 2022 at the expense of brokers and agents.
In 2017, DWP of India’s non-life insurance market was valued at INR1.1 trillion (US$17.1 billion). Agents held the largest share at 41.1% followed by direct sales and brokers at 36.7% and 22.2% respectively.
Direct sales recorded the fastest growth, increasing at CAGR of 21.0% during 2013–2017, mainly driven by a rise in online purchases. By 2022, DWP based on direct sales is projected to be valued at INR848.3bn (US$12.0bn).
Sangharsan Biswas, Senior Insurance Analyst at GlobalData, comments: “Rising online purchase options, including social media and mobile-based payment applications, enable a wider scope for direct sales in general insurance products.
“Growing smartphone and Internet penetration created a wider reach resulting in varied price points and product offerings.”
Insurers are deploying technology to further drive the growth of direct sales in India. They are now using Artificial Intelligence-based customer interface solutions such as chat-bots for product queries, sales as well as payment reminders. This has contributed to better customer relationship management, thereby supporting growth.
Biswas concludes: “Direct sales channel appears to be poised for a bigger role as insurers look to capitalize on technology for better customer-connect.”