• Direct marketing remained the dominant distribution channel in the Indian life segment during 2010-2014, accounting for 50.3% of the new business direct written premium, in 2014 due to its cost-effective nature.


  • Direct marketing follows the approach of company-owned sales team and has proved its effectiveness in creating customer loyalty. The share of new business direct written premium is expected to increase to 63.6% in 2019.


  • Agencies was the second-largest distribution channel in Indian life insurance segment during 2010-2014, accounting for 38.2% of the segment’s new business direct written premium, in 2014.


  • Agencies were the only distribution channel that sold life insurance prior to the emergence of private insurers in the country after the deregulation of the Indian insurance industry in 2000.


  • The strong preference for agencies is primarily due to their large client base, strong brand reputation, and relatively low-cost sales forces. LIC, the largest life insurer in India in terms of gross written premium, had an agency network of 1.20 million as on March 2014.


  • In India, there are two types of agent: independent and corporate. Independent agents or independent financial advisors have tie-ups with more than one insurer, while corporate agents are source policies from one insurer only.


  • Bancassurance was the third-largest channel, with a new business direct written premium of INR116.8 billion (US$1.9 billion) in 2014, accounting for 9.1% of the overall segment. In 2013, IRDAI permitted banks to become licensed insurance brokers, enabling them to sell products from multiple insurance companies.

Source: Timetric IIC report: Life Insurance in India, Key Trends and Opportunities to 2019