Number of rural offices of private life insurers sees big decline

The number of offices of private life insurers in rural India has reduced sharply in the last two years. The number of rural offices of private life insurers were 429 in March 2017, which came down to 58 in March 2018 and remained at that level in 2019, the Insurance Regulatory and Development Authority of India (Irdai) said in its annual report.

There are only 229 life insurance offices in rural India as of March 31, 2019 compared with 590 in 2017. Offices in semi-urban regions also came down from 4,803 as of March 2017 to 4,329 in March 2019.

LIC has doubled its number of offices in semi-urban area, compared to all the private insurers taken together, and almost treble in rural India. The public sector insurer had 2,932 offices in semi-urban areas as on March 2019. LIC has added 19 branches in semi-urban and rural areas, with seven offices being added in rural areas. There are 24 life insurance companies in India, whereas there are 31 in Bangladesh, 182 in the US and 195 in the UK. At the Global Insurance Summit 2019, Vipin Anand, MD of LIC, said there was need for more players to enter this segment.

Chief marketing officer at Shriram Life Insurance R Radhakrishnan said: “The huge opportunity provided by the rural India also comes with its own set of challenges. The nature of customers, their demographic characters, appropriate life insurance product and process design and service delivery are some of the key factors we need to understand before developing our life insurance delivery model.”

Though the premium collection in life insurance sector has increased, much of the contribution seems to be coming from metros and cities. When the number of offices of private life insurers reduced in semi-urban and rural areas, the same increased in metropolitan and urban cities by around 12% and 20%, respectively.

Source: Financial Express