Oriental Insurance to market products through postal network

Oriental Insurance Company Limited has tied up with the department of posts for the distribution of its non-life insurance products through the postal network.

In the pilot phase, the scheme has been launched in three districts each in Karnataka, Gujarat, West Bengal, Kerala, Maharashtra, Tamil Nadu and Rajasthan, the officials of Oriental Insurance and the postal department told reporters here.

This tie-up is part of the memorandum of understanding that was signed last month on a national level.

Initially, only a few products including fire insurance, mediclaim insurance, personal accident insurance for household goods and shops, motor insurance for vehicles and universal health Insurance will be sold at the post offices.

"In addition to the regular services, post offices in urban as well as rural areas will sell these products to the public through its existing staff, trained by Oriental Insurance to explain the benefits of insuring their lives and property," KBH Nayar, Karnataka chief postmaster general said.

In Karnataka, about 100 post offices in the three districts of Bangalore, Hubli-Dharwad and Mangalore will market these insurance scheme and process the applications with premium either by cash or cheque drawn on the insurance firm. Oriental, in turn, will issue the policy documents and settle the claims.

"We are targeting a revenue of Rs 500 crore through premium from the postal network in the first-year of operations. If each post office generates premium of Rs 20,000 annually, the total collection is estimated to be about Rs 3 crore," Oriental Insurance assistant general manager S. Gopalakrishnan said.

He said the penetration of insurance market and expansion in business was expected to be phenomenal through the distribution channel in view of the reach of post offices in rural India.

Post offices are emerging as one-stop solution for many service products including financial, mutual and banking firms who want to make use of its nationwide network to tap the immense business potential in semi-urban and rural areas.

"After assessing the impact of the pilot project, we will extend the facility to other post offices to cover the entire state gradually. " Nayar disclosed.

Currently the level of awareness and penetration in general insurance in the country is very low. India has a per capita premium of $2.3 (Rs 105) as compared to the world average of $153.8 (Rs 7,070).