Different modes of a Sale of Insurance
India is in the fifth position in the emerging insurance industry globally. Did you know? Insurance business is found everywhere – it’s a fact of life.
People will always need insurance to reduce the risks they face in day-to-day life.
What are the modes of insurance sales?
There are many forms of insurance – life, home, health, and car – to name a few. But selling insurance can be challenging and tricky at the same time. Unlike selling a shirt or a mobile, it’s about selling ideas and promises. Broad knowledge in tax and legal aspects of insurance products, strong personalities, and good customer service are some of the qualities to possess in order to be successful.
Listed here are the various modes of selling insurance.
- Direct sales – Direct sales is a method through which insurers sell life policies. The medium can be SMS, direct mail, telephone, radio, newspaper, television. It’s mainly intended as large sales to companies and employers. But it’s very rare due to the lack of face-to-face conversations.
- Agents – Insurance agents interact with clients (individuals, families, businesses) and evaluate the clients’ requirements to determine policies that are best suited for them. They work for an insurance company and sell that company’s products only. They must possess comprehensive knowledge of all the products and services obtainable in the company they work for.
- Brokers – Insurance brokers work independently from insurance companies, i.e., they can promote and sell products from different companies. They are sorted into two categories: retail (insurance plans for people, travel, vehicles, and property) and commercial (insurance plans for ships, planes, huge machinery, and other big-budget assets.
- Web Aggregators – Web aggregators are generally insurance portals registered under the Companies Act and approved by IRDA. They assist clients to compare insurance products by showing information on products of various insurers. When clients are ready to purchase, web aggregators will direct the clients to the insurer or vice versa. They have agreements with insurers to display the information given by insurers; but the content should be unbiased. They can obtain rewards and numerations for the leads converted into insurance policies.
- Insurance Marketing Firm – Insurance Marketing Firm is a company/LLP/any other entity approved by IRDA. It was intended to improve the insurance business industry by selling pension plans, mutual funds, stocks, and other services under single channel. As per IRDA regulations, every IMF can market products of 2 general, 2 life, and 2 health insurance companies. IMF’s have been approved by IRDA to cross-sell to their clients i.e., they can issue a diverse set of products from various sources to an existing client. There are two kinds of licensed professionals – (1) Insurance salesperson – sells marketing insurance products alone (2) Financial service executive – sells other financial services like offering financial advice, mutual funds sale, NPS (National Pension System).
- Insurance Self Network Platform (INSP) – ISNP is an electronic platform set up to conduct insurance e-commerce activity. IRDA had issued guidelines to set standardised rules for conducting insurance e-commerce activities. Anyone interested in selling insurance online can utilise this platform. Also, ensure that all the regulations are followed up. As per guidelines, insurance agents are not permitted to set up a separate INSP. However, they can use the respective insurer’s ISNP.
- POS – IRDA allows the life insurance industry to use point of salesperson to sell basic insurance products. POS persons can work for more than one insurance company. They can easily get trained either online or offline via insurance brokers or financial product agencies. With proper training, they can largely increase the sales. Other benefits include higher insurance penetration, lower prices, and variety of choices to customers.
- E-Commerce – IRDAI has published a regulation draft to facilitate and regulate e-commerce in the insurance industry. It can highly reduce the costs, bring in higher efficiencies, and ensure wider search. The authority has formed two groups – life insurers and general insurers to identify the opportunities of e-commerce in the insurance space and recommend solutions and strategies; thereby creating a digitally empowered society.
As we all know, the insurance industry is growing rapidly, adapting to the continual changing environment is challenging. It demands certain skill sets that include lead generation, sales, marketing, new insurance technologies – to name a few. Fortunately, SIBRO v3 makes the entire broking business simple by saving one’s time and money. It is a godsend for all insurance brokers!