Presentation by : Ajay Shukla Vice President.

1
Presentation by Ajay Shukla Vice
President.
2
Presentation Roadmap

• Introduction
• Broker Regulations
• Role of the Broker
• What the Broker does
• How the Broker does it
• The Broker Approach

3
Historical Perspective

• Four Nationalised Companies
• Four Tier Structure
• Large network of offices
• 4000 offices
• 85000 employees
• Low utilisation of technology

4
India and Intermediation
Historical Perspective

• Pre Nationalisation
• Chief Agents
• Principal Agents Sub Agents
• Individual Agents
• Post Nationalisation
• Individual Agents
• Development Officers (Inspectors)
• Account Managers (AAO (D), AO (D) etc.
• Branch Managers / Divisional Managers

5
Historical Perspective

• The General Insurance Business Nationalisation
  Act (GIBNA) 1972 empowered GIC to formulate
  schemes for the Industry.
• Development Officers Rationalisation scheme
  devised in 1976.
• Commission rules for the industry framed in 1977.

These set of Administrative instructions set
the ground rules for intermediation in
insurance, post nationalisation.
6
Historical Perspective

• Limitations of Commission Structure
• Percentage of agency commission for all
  products/classes of business.
• Substantial business with no agency commission.
• Business with special discount.

The Result Agency system never flourished.
7
Market Segmentation
Historical Perspective

• Product Driven with basic customer segmentation

• Product Segments
• Fire
• Marine
• Motor
• Engineering
• Miscellaneous

• Customer Segments
• Govt / PSB
• Tied Clients
• Market Business

8
Drivers of Change

• Socio-economic and political context
• Changing Regulations
• Increasing Competition
• Convergence and consolidation
• Emerging Technology
• Changing customer concerns and buying habits
• Broadening distribution patterns

9
Distribution channels based on insurance
awareness and complexity of product.
Professional Broker
high
Telephone / electronic / internet
Company Acct Manager
Branch
Banks
Customer awareness of their need
worksite marketing
Tied agent
Low
Simple
Complex
product complexity
10
Graphic presentation
Increasing role of Broker
11
Broker Regulations

• IRDA (Insurance Brokers) Regulations,2002
  notified on the 16th October 2002.
• The regulations prescribe inter-alia
• The duties and responsibilities to the client
• Training and examination
• Minimum capitalisation, education and competency
  levels
• Code of professional conduct and grievance
  procedures
• Levels of professional indemnity coverage
• Maximum remuneration levels
• Modalities for monitoring the performance of
  brokers