Sale of life products on CSC net work yet to pick up

Lower commission for the agents, lack of awareness could be the reason

The initial response to the sale of insurance products on the Common Services Centre (CSC) network has not been quite encouraging for the life insurance products as much as it’s used for buying third party motor insurance policies by rural customers.

“Somehow, we had not been able to sell more than a thousand policies since we launched the savings-cum-life cover product on the CSC platform in August this year,” Subhash Kumar Ray, unit head (Actuary) of Indiafirst Life Insurance Company told Business Standard.

Indiafirst is the first company to launch its products on the CSC platform after the Insurance Regulatory and Development Authority (Irda) granted licence to e-Governance Services India Limited-owned CSC platform as an authorised intermediary to sell insurance products.

According to Ray, there could be several reasons such as lower commission to an agent or lack of awareness.

There are about 150,000 such platforms operating across the country and are fairly visible with the citizens using them regularly for paying utility bills or for accessing  public services. This is the reason why Irda saw it as an important tool to push insurance penetration and issued a separate set of product guidelines mostly to make them affordable to the rural consumers.

The guidelines, for instance, say the insurance cover should not exceed Rs 2 lakh except in the case of motor insurance.

Indiafirst has also made Aadhaar card linkage mandatory for issuing policy through CSCs. This is also expected to give some initial difficulty in scaling up the business in this segment. However, Ray says the move will help in saving a lot of paper work besides following a healthy KYC practice.

The company, which is a joint venture between Bank of Baroda (44 per cent), Andhra Bank (30 per cent) and the UK-based Legal & General (26 per cent), is currently focusing CSC products

The CSCs are finding a quick relevance where there is a clear gap in access to these products such as the third party motor products, which were allowed along with the life products by Irda in the past.

“We see a lot of response coming for the third party motor insurance policies being sold on CSCs as the third party cover is not sold as a standalone product by the agents,” Rishiraj Singh, project manager of e-Governance Services India Limited, said.

The response to third party products is instant as over 60 per cent of the bike-owners do no bother to renew vehicle insurance, according to Singh. Currently, more than 20 insurance companies have entered into agreements with e-Governance India to roll out their products on the CSC platform.

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.

This comes at a time when Irda has allowed five more standard products — personal accident insurance, cattle/livestock insurance, agricultural pumpset insurance, farmers package policy, fire and allied perils dwellings insurance — on the Common Services Centre platform.