The Indian insurance sector shows distinct patterns across general, health, and life insurance segments, with notable differences between public and private sector approaches to distribution. Each segment reveals unique characteristics in how insurance products reach consumers. The insurance distribution landscape in India can be broadly categorized into six main channels:
- Agency Networks
- Brokers
- Direct Sales (including internet channels)
- Corporate Agency – Banks (Bancassurance)
- Corporate Agency – Others
- Other Channels – PoSPs, MISPs
General Insurance Business (Without Standalone Health Insurance)
Public sector general insurance continues to rely heavily on agencies (32.4%) and brokers (32.2%), while direct channels (30.7%) play a significant role, benefiting from strong brand presence.
In contrast, private sector insurers prioritize brokers (42.5%) for market expansion, with direct channels (21.8%) playing a comparatively smaller role. Agencies hold a reduced share (14.4%) in private insurance, indicating a shift toward alternative distribution models. Bancassurance is more prominent in the private sector, with corporate agents—banks (9.1%) and others (5.9%)—gaining traction. Overall, while digital adoption is growing, intermediated distribution remains dominant across both sectors.
Standalone Health Insurance
Standalone health insurance saw a balanced mix, with agencies (29.8%) and brokers (29.3%) leading, while direct channels (26.7%) gained traction, indicating growing digital adoption. Bancassurance maintained a moderate but emerging presence across sectors. Despite digital advancements, offline channels continue to dominate, reinforcing the need for a hybrid distribution approach.
Group Health v Retail Health Distribution
Individual (retail) health insurance distribution was overwhelmingly driven by agencies, which accounted for 72.4% of the total, emphasizing the continued reliance on personalized advisory services in this segment. Brokers contributed a limited 9.5%, reflecting a comparatively smaller role in individual health policies. Direct sales remained modest at 5.8%, indicating that while digital adoption is growing, intermediated distribution continues to dominate the space.
Group health insurance was primarily driven by brokers, who accounted for 49.6% of the distribution, underscoring their crucial role in structuring tailored policies for businesses. Direct sales contributed a significant 28.4%, reflecting a growing preference for insurer-client engagement without intermediaries. Bancassurance held a notable 12.4% share, highlighting the increasing role of banks in distributing group health policies through corporate partnerships.
Life Insurance Business
In the public sector, agency channels dominated with a near-total 96% share, reinforcing their entrenched role in distribution, while bancassurance remained minimal at 2.9%. Conversely, the private sector showcased a different strategy, with bancassurance leading at 52%, followed by a substantial agency presence at 22.7% and notable direct sales at 16.1%, reflecting a more diversified approach.
Group life insurance exhibited a stark contrast between sectors—public insurers relied overwhelmingly on direct channels, which accounted for 93.2% of distribution, whereas private insurers maintained strong direct sales at 54.9%, complemented by a significant 22.9% share from bancassurance, indicating a balanced mix of distribution strategies.
Insights from the above analysis
- Agency Networks Still Dominate: Public sector insurers and retail health insurance continue to rely heavily on agents, highlighting the need for personalized advisory services.
- Brokers on the Rise: The private sector increasingly leverages brokers, particularly in general and group health insurance, reflecting a shift toward expert-driven, customized policies.
- Bancassurance’s Growing Role: Particularly strong in private life insurance (52% share), bancassurance outperforms other corporate agency models by integrating insurance with banking services.
- Offline Channels Remain Key: Despite digital growth, brokers and agents continue to drive distribution. A hybrid model—balancing physical and digital channels—is essential for long-term success.
- Diverging Health & Life Insurance Trends: Retail health relies on agents, while group insurance favors brokers and direct sales. Public life insurers lean on direct channels, while private players balance bancassurance, direct, and agency sales.
- Digital Sales Gaining Traction: Direct and internet-based channels are growing but remain supplementary. Insurers must integrate digital innovation with traditional networks for sustained market reach.
Final Thought: The future of insurance distribution in India lies in a blended strategy—leveraging both offline expertise and digital efficiency to enhance accessibility and customer engagement.
