Policy Sales Through Common Service Centres Still Low

Insurance sale through Common Service Centres (CSCs) is yet to see big growth, due to lack of trained sales personnel and low awareness among customers. Companies had earlier said the regulatory norms on the fees wouldn’t support the expense associated with this channel. With expenses on management also tightened, insurers are not in a position to make heavy investments. “We are yet to see a big traction from this channel. Our hands are tied and we are unable to allocate more funds for distribution from these centres,” said the head of distribution of a private life insurer.

The Insurance Regulatory and Development Authority of India (Irdai) had said companies could tie up with CSCs to act as insurance brokers to sell both life and general insurance policies. Initial tie-ups are under way with the new payments banks. Once such agreements are done across the board, it is expected these niche lenders would make premium payments quicker and cost-effective.

CSCs are a part of the National e-Governance Plan. There are expected to be about 130,000 of these, with a focus on rural areas. The aim is to provide high quality and cost-effective video, voice and data content and services, in the areas of e-governance, education, health, tele-medicine, entertainment and other private services. Insurers have been asked to file special products that can be only sold through this channel, such as simple ones of low ticket size that are easy to understand. Irdai had said these products should not have a sum assured exceeding Rs. 2 lakh (except motor insurance) per life or risk.

Complex products like unit-linked insurance plans are not being offered, as rural customers would not have a trained officer to help them understand the product structure and returns.

CSCs being involved in multiple transactions is also a concern. The chief executive of a large private life insurer says insurance is a ‘push’ product and not a priority at these centres. These channels can also offer services like birth and death certificates and utility payments such as electricity, telephone and water bills.