Direct marketing is one of
the most successful channels of distributions in the developed economics. Direct marketing channel
is also known as zero-level channel. It
consists of a company selling directly to the final consumer. In other words,
service providers are more likely to visit corporate customers at their
premises than to visit individual at their homes, reflecting the large volume
associated with business to business transactions.
LIC has adopted the direct
marketing approach to develop the
group insurance market the direct
marketing . As such it has succeeded in keeping the cost ratious under group policies at very low levels.
Private insurer are also engaging in direct
marketing to high net worth individual through channels like-work site
marketing a relatively inexpensive and
easy launch potential distribution channel.
(II) AGENTS: The agent are the first line or grass-root workers of
an insurance company. They do not take title to goods and
service and perform only a few
functions. They are not no on the rolls
of the company and work as middlemen
between the insurance
company and the customer.
Their duties
included. (a) Prospecting the clients: (b) Meeting prospective clients to explain and discuss different plans of insurance. ( C ) Finalizing the sales. (d) Forwarding the proposals to the
company’s office. (e) Attending to the requirements if any for the acceptance of those proposals. (f) Rendering post-slaes services.
The role of the agent today is becoming
more and more important. He is no longer looked upon as simply an agent but also asa financial
adviser. Agent generated sales of insurance products are predicted to grow by $ 11billion over
the next five years especially within
the high net worth market. Though SBI life and Aviva India have
successfully sold their product through
the banks insurance channel they both
feel the need to the extend their distribution sales and focus on the agency
force.
LIC, the monolithic organization
has an agency force of 9,02,199 during 2002-03 and the productivity of each active agents stands at Rs. 19,51,
767. In case of ICICI prudential Life too, 70% of its business in the financial year 2004 came through direct agency force. This shows that agency force has
immense potential due to the fact that
many of the insurance products are highly complex and the selling of the
these complex products require greater
knowledge and understanding . These
products can better marketed through certified
insurance facilitators or agent:
(III) BROKERS: With the introduction of broker regulation this could be
the next hope, especially for the urban market. This will be a new
experience for the insurance customer accustomed to brokers in financial services real state and travel and tourism.
For historical reasons. the image
that broker carries in the minds of the
customers is not favourable. Thus the new breed of insurance brokers face the challenges of establishing credibility.
They seek to determine the best fit for the client and can effectively address the mental block faced by the public
about various companies. This is applicable in the case of the life insurance for the high end corporate group
segment