Life Insurance Marketing in India (B): The Changing Distribution Norms

Distribution Initiatives of the New Players

Post-liberalization, a fierce battle commenced in the Indian insurance industry for garnering market share. New insurance companies used all available channels of distribution, right from individual agents and corporate agents to bancassurance. Bancassurance soon emerged as one of the most lucrative insurance distribution channels.

According to analysts, it not only helped insurance companies increase market penetration and premium turnover, it also helped banks increase their Return on Assets (ROA - annual earnings divided by total assets).

This was because, even with a constant asset base, bancassurance contributed to enhanced ROA through fee income. (Refer Table II for various bancassurance agreements).