 "Policy sales through CSCs 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.
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.
Insurers have also raised concern about customer privacy and data theft, especially as rural customers will make all transactions, personal and financial, through CSCs in their area. At a time when the insurance regulator has placed huge emphasis on anti-money laundering norms, this is another worry for insurers, as CSCs would deal with cash.
Irdai regulations say for soliciting business, each CSC would have an authorised person who would have to complete 20 hours of theoretical training from a recognised institution and then undergo an examination.
The model envisages a three-tier structure, of the CSC operator, service centre agency (responsible for a division of 500-1,000 CSCs), and a state government-designated agency responsible for managing implementation across the state.
Insurers have been asked to file special products that can be only sold through this channel. This includes simple products with low ticket size that are easy to understand for the customer.
Complex products like unit-linked insurance plans (Ulips) are not yet being offered. The CSCs being involved in multiple transactions is also a concern being cited by insurers. The chief executive of a large private life insurer said that insurance being a push product is not a priority at these centres.
This channel can offer services like birth and death certificates, and utility payments such as electricity, telephone and water bills.
In its guidelines on the CSC model, IRDAI had said products should not have a sum assured exceeding Rs 2 lakh (except motor insurance), per life or risk.
Insurers have also raised concerns about customer privacy and data theft, especially since rural customers will make all transactions, personal and financial, through CSCs in their area.
At a time when the insurance regulator has placed huge emphasis on anti-money laundering norms, insurers are also concerned about using this channel, as CSCs would deal with cash.
In its regulations, IRDAI said for solicitation of insurance business, CSCs would have a rural authorised person, who would have to complete 20 hours of theoretical training from a recognised institution and subsequently undergo an examination.
The CSC public-private partnership model envisages a three-tier structure — the CSC operator, the service centre agency (responsible for a division of 500-1,000 CSCs), and a state-government designated agency responsible for managing implementation across the state.
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.
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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.
Insurers have also raised concern about customer privacy and data theft, especially as rural customers will make all transactions, personal and financial, through CSCs in their area. At a time when the insurance regulator has placed huge emphasis on anti-money laundering norms, this is another worry for insurers, as CSCs would deal with cash.
Irdai regulations say for soliciting business, each CSC would have an authorised person who would have to complete 20 hours of theoretical training from a recognised institution and then undergo an examination.
The model envisages a three-tier structure, of the CSC operator, service centre agency (responsible for a division of 500-1,000 CSCs), and a state government-designated agency responsible for managing implementation across the state.
Insurers have been asked to file special products that can be only sold through this channel. This includes simple products with low ticket size that are easy to understand for the customer.
Complex products like unit-linked insurance plans (Ulips) are not yet being offered. The CSCs being involved in multiple transactions is also a concern being cited by insurers. The chief executive of a large private life insurer said that insurance being a push product is not a priority at these centres.
This channel can offer services like birth and death certificates, and utility payments such as electricity, telephone and water bills.
In its guidelines on the CSC model, IRDAI had said products should not have a sum assured exceeding Rs 2 lakh (except motor insurance), per life or risk.
Insurers have also raised concerns about customer privacy and data theft, especially since rural customers will make all transactions, personal and financial, through CSCs in their area.
At a time when the insurance regulator has placed huge emphasis on anti-money laundering norms, insurers are also concerned about using this channel, as CSCs would deal with cash.
In its regulations, IRDAI said for solicitation of insurance business, CSCs would have a rural authorised person, who would have to complete 20 hours of theoretical training from a recognised institution and subsequently undergo an examination.
The CSC public-private partnership model envisages a three-tier structure — the CSC operator, the service centre agency (responsible for a division of 500-1,000 CSCs), and a state-government designated agency responsible for managing implementation across the state.