What should be the strategies for marketing insurance products in rural areas?

In my opinion, the key challenges in reaching potential insurance clients in small towns in India, the foremost is building knowledgeable and competent distribution channels. The knowledge level and skill of agents require to be substantially upgraded, given the fact that insurance industry is now competitive and the new products that are being launched require a reasonable degree of understanding of how the financial system works.

In my view, for making a product acceptable to any 'category' it is important to understand that category well and come out with the right strategies. Rural Insurance is no different.

One of the key issues we have in making the insurance products avaialble to the rural population is the product strategy itself. Let us clearly accept certain facts. Currently, insurance is being sold either as a 'tax saver' or as an 'investment'. Hardly any 'Insurance Sale / advise' happens. Owing to the product positioning, it is clearly segmented for the 'investing & tax paying' communities.

Rural income largely from agriculture and average incomes being lower, does not attract tax. Hence, the strong factor for selling an insurance in the Urban area does not hold good in the rural areas. I do hear remarks when one reads the above point that there are enough products which are insurance focused. But, the fact is that these are not marketed and are not promoted. Being in the shelf is of very low significance.

While there are challenges like reaching the masses, cost of distribution, logisitical issues etc. in my opinion the strategy and the commitment to this line of business preceeds everything else. If the strategy and commitment to do the rural insurance is there in a Company, they will be able to easily find solutions for each of these problems. Let us face it, you get bottled drinks and water in the smallest of the locations through out the length and breadth of the country which  makes it clear that it is possible to serve these locations as long as there is a commitment and strategy to do so.

Happy Rural Insuring.

KS

CEO, PowerMF.com,

Online Mutual Fund Platform

In rural areas the income comes mainly from agriculture, government jobs and / or shops. If the government can link insurance with their income it will be a compulsory saving that the household makes. Also a conscious effort needs to be made towards premiums and the allowance to make it monthly would be of greater impact. Also, if the insurance guys can develop some plan which enables the insured to get money back at the end of each year, that would be a very lucrative deal.

In rural areas being cash rich is the most prestigious thing rather than showing a debit card of a bank!!

I believe, given the established role played by the individual agency force in selling insurance products, and its particular relevance in rural areas, it is essential to fortify this channel with a set of new inputs. There is a rapid change witnessed in the market in the complexion of insurance products, with the end of the era of high, assured return insurance policies. Insurance products should be that are relevant to people at different life stages and enable an individual to get the best value for the objectives he or she has in mind.

Nowadays, mostly urban's people purchased Insurance  Product to reduce theier  Income tax laiabilties. But I think It's role is more than as we measured. It play a dual role in our country economic Development & Growth. One side it motivate to peoples for  more savings and another side it provide  long terms  fund to economy for their devlopment & growth.  It is not even an instrument to save the income tax but a instrument which can Motivate & promote to savings too. But I think that Insurance product is not for urban people only for tax saving instruments but it is a product for every class of people in our country. It is a kind of social  econmics security  instrument  which  not even Motivate &  promote for saving in  Middle & Lower class peoples but also fund provider to various industries as well as generate employment directly &  indriectly thrugh Insurance Business . Therefore  I reueqest to all the Govt. agencies directly or indirectly link or conerned in insrurance's business promotion in country not  come togather for its promotion and not  to limit their exemption circle up to Rs.1.0 lac (Rupees one lac) u/s 80c in Income Tax Act 1961 but more than it to promote insurance business in our country more. I think  as well as its exemption limit will be increased. Then it will notevene  generate    more funds  thrugh savingt but also helpfull in providing funds for our country's economic development &  growth.

for effective rural marketing one will have to go near them, stay put and build confidence, only then business will follow. Touch and vanish, as being done by pvt. insurance cos wont run for along time.

The people living in small towns and villages does not have regular income and safe savings. They cannot spend on costly insurance products. There were hardly exclusive products for the rural rich or middle class. The principle of differential pricing is a necessity. So,in my view, if insurance products are given in reduced price, they can expand into the vast rural markets. Must cost is not incurred in advertising as in urban, so they have a reduced cost and a new pricing policy is possible.