27-09-2019
Direct sales threatening brokers and agents in India
Insurance Alertss|
27-09-2019
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Direct sales threatening brokers and agents in India
The rise of the direct sales channel is poised to weaken the traditional dominance of brokers and agents in the Indian general insurance industry over the next three years, a study by GlobalData has found.
The report, titled ‘Strategic Market Intelligence: General Insurance in India - Key Trends and Opportunities to 2022’, reveals that the share of direct sales in terms of 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), the report said. Agents held the largest share at 41.1%, followed by direct sales at 36.7% and brokers at 22.2%.
Direct sales recorded the fastest growth, increasing at CAGR of 21.0% during 2013 to 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).
In 2022, the study predicts that direct sales will be the largest channel with 42.4% of DWP, with agents shrinking to 38.7% and brokers down to 18.9%.
“Rising online purchase options, including social media and mobile-based payment applications, enable a wider scope for direct sales in general insurance products,” commented Sangharsan Biswas, senior insurance analyst at GlobalData. “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 chatbots for product queries, sales, and payment reminders. This has contributed to better customer relationship management, thereby supporting growth.”
Source: Insurance Business ASia