IRDA has permitted besides insurance agents
1. Brokers
2. Corporate agents
3. Bancasurance
as authorized to carry Life Insurance in India,

Brokers

Brokers are allowed in insurance business.

They arrange to place the business of their clients with insurers on terms that are standard or negotiated.

This becomes necessary when the needs of the proposer are unique and not met by the benefits under the standard plans of insurance.

Brokers understand the nuances of the business well and also know the policies of the insurers.

A broker does business with more than one insurance company.

He collects commission from the insurer with whom the business is placed and does not charge the prospect.

This system works in many countries.


Agency and Brokerage Systems

Agency and brokerage systems are most common and contribute maximum share of life insurance business in the developing and developed countries.

The broker has to register himself with the Insurance Development Development Act.

A high standard of professional skill and conduct is expected of a Broker. If he fails, he may be liable for damages to the principal.

Distribution Channels in India Bancasurance

* The Concept of Multi-channels of Distribution viz. Insurance Intermediaries is gaining ground:
* Bancasuurance is one form of Intermediary
* Setting up a subsidiary for banking / non-banking financial functions
* Entering into joint-venture with an existing banking chain
* Bancasuurance is Well spread in Euro nations – France, Belgium, Netherlands, Italy, Switzerland, Luxemburg
* Bancasuurance is a marketing method – by which the insurance products are sold at the bank counters.

Distribution Channels in India - Banks

* Considerable good will and access in rural India – 32600 Branches, 14400 Semi-urban Branches – where insurance growth has been most buoyant; 196 exclusive Regional Rural Banks in deep hinterland.

* Enormous retail customer base – total of 406 million accounts with aggregate deposit of Rs. 7,00,000 Cr. At September 2000. Rural and Semi-urban bank accounts 60% in number.

* Bank are entering into insurance business line (State Bank of India)
LIC entered strategic alliance with Corporation Bank
Banks are the key pillars of India’s financial system. Public have immense faith in Banks.
* Share of bank deposits in the total financial assets of households has been steadily rising (about 40%)
* Banks have immense reach – 65700 Branches – each serving an average of 15000 customers.

e-distribution – A distribution channel

e-business is significant for insurers

e-distribution to be a critical supplementary channel for players

Empowering the ultimate consumer through offering value-added services over the internet
Legal framework and infrastructural availability

Corporate agents


* The IRDA has issued the “Corporate Agents” act which allows Corporates to take up agency
Many Banks and firms have been enrolled as Corporate agents
* The agency rules are almost similar to the “General Agents” except that the commission is paid to the Corporate agent