CSCs offer non-life insurance products in rural areas to boost reach

Routing standard general insurance products in rural areas through CSCs is easier and cheaper than setting up branch operations

Common service centres (CSCs) have now been allowed to sell standard general insurance products which are simple to understand in rural areas. With this, simplified products like personal accident plan, livestock insurance, fire and allied perils “dwellings” policy and farmers’ package policy can be sold through this network.

General insurance officials are of the view that it will now be easier to sell products in rural areas, without having to set up branch operations.

“Non-life insurers already have branches in large cities. But in rural areas, this involves a significantly larger investment in branches. Hence, selling through CSCs will not only help us in reaching more customers, it will save costs as well,” said the head of distribution at a private general insurance company.

CSCs have begun sale of insurance products from August onwards. Recently, Rishiraj Singh, project manager of e-Governance Services India Limited told Business Standard they expect a positive response for the third party motor insurance policies being sold on CSCs, as this is not sold as a standalone product by agents.

To increase awareness about the insurance products sold on the CSCs, e-Governance Services is planning to hold some 600 workshops across the country starting January next year.

Insurance Regulatory and Development Authority (Irda) has said the commission for fire and allied perils dwelling insurance will be limited at 15 per cent whereas for all other products it will be set at 10 per cent. The maximum sum assured is limited at Rs 2 lakhs for all these products.

Though insurers agree that CSCs would be able to aid in deeper penetration of rural markets, they would only be selling simple product. The general manager of a state-owned general insurance explained that insurance penetration for non-life segment which stands at less than 1 per cent of the Gross Domestic Product would get a definite boost if all products are sold through CSCs.

“Rural customers would be able to get information about insurance and the various products sold by general insurers even when they visit CSCs for other activities like bill payment,” he said.

CSCs are a part of the National e-Governance Plan. The Centre plans to roll out about 1,50,000 CSCs across the country with a focus on rural areas. These CSCs are aimed at providing high quality and cost-effective video, voice and data content and services in the areas of e-governance, education, health, tele-medicine, entertainment and other private services.

The CSCs will offer web-enabled e-governance services in rural areas. They can offer application forms, certificates, and utility payments such as electricity, telephone and water bills.