Robust proprietary channel needed for insurance sector: BCG

A robust proprietary channel is necessary for sustained growth of the insurance sector, a BCG report said today.
While multi-partnership bancassurance architecture will open up opportunities for insurers, health of the agency channel cannot be neglected, said the Boston Consulting Group (BCG) report, which was released here during a FICCI insurance summit.
Agency channel economics are difficult to sustain for most insurers, the report said, adding that it is likely that India is the only large country in the world with a fixed cost agency channel.
Not enough insurers have truly attempted to design the agency of the future and hence this is an opportunity to innovate and take the lead in this space, it said.

"At BCG, we have identified major trends such as digitisation, changing consumer needs and ageing changes that are expected to impact the sector in its next phase. However, the challenge lies in sustaining profitable growth," said Alpesh Shah, BCG India Senior Partner and Director, and Head - Insurance Practice in Asia.
"In the report, we have defined a 14-point action agenda for Indian insurers that could lead to achieving this target," he added.
Some of the other challenges as defined by the report include realising the full value of third party channels, going directly to consumers, claims excellence and next generation leadership.

The report has also asked insurers to go for right pricing of their products.