India even has digital insurance companies with little physical infrastructure or network, offering their products and services only in cyberspace.
In the last decade and a half, the insurance industry has significantly widened its channels of distribution. Earlier there were only agents selling personal insurance. Now, not only has the number of agents boomed, several other channels of insurance sales have also been created giving us choice.Corporate agents, including bancassurance partners, insurance marketing firms and insurance brokers are the offline, or old-fashioned person-to-person sales channels. You can buy online from web aggregators and insurance companies directly. Digital insurance India even has digital insurance companies with little physical infrastructure or network, offering their products and services only in cyberspace.Corporate agents, as opposed to individual agents, are organisations / institutions that are licensed by insurance companies to sell the latter’s products. They can be one of a wide variety, like a limited liability partnership, companies, including banking companies, rural banks and co-operative banks, co-operative societies, panchayats or local authorities. Non-governmental organisations (NGOs), microfinance institutions (MFIs) and non-banking financial companies (NBFCs) can also take up selling insurance through corporate agency. A corporate agent can sell life, non-life or health insurance policies, or acquire a composite licence and sell a combination of any two of these or all three. They can represent up to three companies in each category. So, you will be able to access more types of policies from a corporate agent as you have three insurers’ offerings to choose from as opposed to one company’s policies from an individual agent.Policy claimsPolicy claims can occur years after purchase, or in another city. This is where a corporate agent, with business continuity, becomes handy as someone in the organisation would be handling the portfolio. A corporate agent with a wide network can provide service across locations.The other advantages of dealing with an organisation is that its financial and legal status are specified and vetted by the regulator for registration and continuously monitored through reporting systems and inspection afterwards. So are its structure, infrastructure, choice of officials, their qualifications and suitability for the role and qualification, training and other requirements of the actual selling staff.Corporate agents are bound by a similar code of conduct as individual agents with regard to proper disclosure, transparency and putting your needs and requirements first.They are both supposed to “render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer,” says the IRDAI regulation, while outlining a code of conduct for them. It is seen commonly though that this assistance is not forthcoming.With the advent of TPAs in health insurance and vehicle service centres having tie-ups for cashless processing of claims, the claims’ support role of agents, including individual agents, is getting ignored entirely to our disadvantage.Given all these, do you choose an individual agent or corporate agent? (Or, one of the other types of intermediaries we will be looking at?). The answer lies in your clarity regarding your insurance and servicing needs; like, if your professional life results in mobility. The relationship you have with your intermediary will, of course, be the icing on the cake!(The writer is a business journalist specialising in insurance and corporate history)
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