Insurance in India is expanding its horizon. With India emerging as one among the
fastest growing economies in the world, and with its vast population, there is a huge
untapped potential for insurers. On the other hand, the emergence of Internet is creating
new values for both customers and companies, which has in a way compelled
insurance companies to explore their potential as a new distribution channel. This paper
attempts to understand the customer awareness, usage and perception towards the
Internet as a channel for insurance distribution. The results indicate that though the
awareness is high, the usage is notably low. Customers perceive trust/credibility,
support, information, communication and prospecting as significant factors affecting their
decision of choosing Internet for insurance products.
The Indian industry, taking advantage of positive conditions in the economy, has seen
a spectacular growth in the recent years. Against this backdrop, the insurance industry
in India has undergone a significant transformation and emerged with noticeable
trends. However, it faces increasingly tremendous challenges because of changing
customer demographics, technology, regulatory changes and emerging distribution channels.
In addition, due to India's large population which now possesses greater risk
awareness, the insurance market has now become global by attracting foreign insurers. These
well-defined external drivers of change have fueled increased competition; as a
result the dynamics of the industry were altered and new parameters set.
Among the multiple challenges faced by the Indian insurance industry, what is
apparent and critical in its novel shaping is the role of distribution channels. With
penetration being a key to growth, the focus area is the development of appropriate
distribution channels. Distribution has emerged as the key differentiator, and companies
are leveraging their resources to identify and exploit the right channel mix to reach
potential customers. Channels are perceived as a vital link in the economics of insurance.
They enable value creation, impact profitability and market image. The industry has
already witnessed a spurt in distribution modes with global marketing practices adopted
and innovative ideas being tested by private players in the market. The
Insurance Development Regulatory Authority (IRDA) has also been making appropriate
changes from time to time, in order to meet the emerging needs and provided speedy
and effective responses to changing circumstances. This resulted in the evolution of
different channels ushering a distinctive beginning in this regard. Changing the
fundamental character of the market, a new array of opportunities both in terms of new modes
and new partner organizations, were developed to distribute products. |
