Life insurers eye rural areas in North for growth

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Chandigarh, Nov 19: After having attained saturation level in the metros and other prime cities, more and more life insurance companies are heading north with the aim of reaching out to the rural households.

The fact that there is high awareness amongst the households but very low ownership motivates these companies to expand their base to the small towns. As per industry estimates, out of 78% households that are aware about life insurance only 24% own a policy.

R P Singh, executive vice president & head, emerging markets for Max New York Life shared that about 74% of the national population falls under rural category and there is huge scope for exploring this market. “We started operations from Patiala in Punjab in November 2003 following the hub and spoke model. Under this, we have one district level office (hub) and eight spokes attached to it. These spokes cater to around 2,000 villages and at present we have 8 hubs and 23 spokes in Punjab,” he said.

“Recently we have expanded our operations in Haryana and established one hub and 7 spokes. Overall about 5 lakh policies have been sold to the rural sector so far. We plan to ramp up the scale to 100 hubs and spokes by the end of this year by launching our services in other states like Gujarat, Maharashtra etc,” he further added.

The company also creates awareness through village education camps, by distributing product brochures and proposal forms in local language and organising village meetings, road shows and melas for direct contact with the customers.

On the other hand, Kotak Life Insurance is adding 3 new branches in Ambala, Karnal and Hisar to take the total number of branches to 17. Yog Raj Sharma, national sales head (Tied channel), Kotak Life Insurance told FE, “We are ramping up our distribution significantly to reach up to the Tehsil level and plan to launch branches in the rural areas to increase our present market share of 20% in northern states. With new branches coming up, we will be able to take our services to other semi-urban and small towns like Kalka, Pinjore, Ramgarh, Parwanoo, Zirakpur, Derabassi, Nissing, Ghaurandah, Indri, Nilokheri, Tarawari, Hansi, Barwala, Bhivani, Tohana, Fatehabab, Pehowa, Ismailbad, Rajpura, Naryangarh and Shajadpur.”