Taking insurance to rural India

Start-up broking firm does it with mobile office


Hardsell: A mobile office of Allegion selling insurance in a village in Tamil Nadu


Chennai, Aug. 8 In all his 51 years, Sakthivel of Mannur had only heard blares of political propaganda interspersed with Tamil film music over van-mounted loud speakers.

Last week, to his surprise an unusual message issued out of one such loud speaker — the people of Mannur should buy insurance. Sakthivel cocked his ears towards it.

Presently, the vehicle rolled into sight. A Maruti Omni van with its back rebuilt as a counter. Inside it sat a man with a computer, a printer and other office paraphernalia.

Intrigued, Sakthivel cut through the small crowd that had gathered around the vehicle and approached the man in the counter.

“What are you selling?”; “Insurance”; “What is insurance?”

That is the difficulty in taking financial products, particularly insurance, to rural populace. In the best of places, insurance is hard to sell — you ask for money in return for a promise. It, therefore, costs money to sell the product. Here you have to start from the scratch. Besides, the ticket size is so small, the cost-return equation is hard googly to play.

So, find a cost-effective way of selling insurance to Sakthivel and others, you have a winning proposition.

Alegion Insurance Broking Ltd believes it has found a way — a mobile office.

According to Mr N. Raveendran, Managing Director, Alegion, test marketing with one refurbished Maruti van has showed that it is possible to sell insurance products cost effectively in small towns and villages. Now, Alegion intends to buy 30 more such vehicles, initially, to cover the four southern States. The grand plan is to buy at least 500 vans — one for each revenue district in India, over the next 18 months. “I have already spoken to Maruti,” says Mr Raveendran.

But how would a start-up broking firm shell out Rs 20-odd crore needed for the project? Mr Raveendran’s answer is simple. A lot of insurance companies see value in the proposition and have committed funding. Some of the larger funders may also have their names painted on the sides of the vans or their commercials aired on the loud speakers.

Alegion intends to sell both life and non-life. “Most of the rural folk have never bought an insurance product because they’ve never been sold one,” says Mr Raveendran. Now, the man in the van will do that. The vans, linked to a ‘control centre’ in each State, will be able to cover a lot of ground. Each van will cover the entire district at least once in a fortnight.

“We are creating an enabling infrastructure that could be used by all companies,” notes Mr Raveendran.


Source: THE HINDU BUSINESS LINE