One Problem, Different Manifestation: Distribution Woes At HDFC Life And SBI Life

Abstract

Life insurance distribution in India, like elsewhere, is in a transitory phase. Technological advancements and an untapped market have opened up new vistas in the field. Customer offerings through multiple touch-points seem to be the mantra. While a multi-channel strategy does offer the outreach, there are a number of issues, including, channel conflict, channel cannibalization and channel misalignment, which act as a dampener to such a strategy. The other question is that of finding an optimum distribution mix. We, by virtue of this paper, attempt to delineate the aforesaid, highlighting the manifestation of the same problem of distribution, albeit differently, rather contrastingly - concurrently suggesting the solutions – through two similar bank led (large bank as group company / bank promoted) companies, HDFC Life and SBI Life. Distribution woes have resulted in an uncertain distribution landscape with no clear pattern in sight. Industry numbers show a shrinking agency, a robust bancassurance and a rising online channel. But the pattern is all lopsided in HDFC Life and SBI Life. How to balance the distribution mix, then? Does that mean doing away with the not so hot agency channel? Or does preserving agency still make sense? Or fortifying the banca further is the need of the hour? Or, can the currently hot direct / online channel be pursued vehemently? The implications of such distribution patterns are immense for an industry trying to find a way out of the muddle.