Speaking at a national seminar on Outlook for insurance industry for next decade - Issues and Prospects, Mr Rao said that even now the non-life market is dominated by direct sales. Over 60% of the customers still visit our offices to take insurance, as it is compulsory, such as motor vehicle insurance etc.
At least now the insurance companies should look forward to work with the brokers and provide value added service to the customers, he added. He pointed out that the public sector insurance companies have still not adjusted themselves to the new distribution channels consisting of brokers, corporate agents etc.
Further, raising the issue of service tax on insurance, Mr Rao opined that it is not fair to tax insurance since it is not a service. The insurance policy must be considered as a product and if government wants to charge the insuring public, they can impose premium tax, which is prevalent in the developed countries, he said.
The one-day national seminar was organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI), which has largely discussed on various steps required to be taken by the insurance companies to penetrate the vast rural markets.