The working group on risk management in
Crop Insurance Marketing & Distribution
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| 5.2. Crop Insurance Marketing & Distribution 5.2.1. Traditional Insurance Marketing Insurance by nature is mistakenly believed to be sold, not bought. Currently, it is partially true. Crop insurance aims at farmers who are mostly resource-poor, with limited access to information, making typical marketing difficult. Hence, very substantial awareness and dissemination programs are essential. Particularly , as an urgent intermediary step to create a climate which would facilitate the effectiveness of direct selling personnel, cost effectively. Traditionally insurance is sold and serviced through insurance intermediaries consisting of insurance agents and insurance brokers. Insurance agents could be both individual and ‘corporate’, but can work for only one life insurer or one non-life insurer, or both (composite agent. Agents represent the insurance company. Brokers are rather new to the Indian insurance industry, and came in only after reforms in the insurance sector. Brokers represent the insured party and can take the business to any insurer, who offers the best insurance terms. Unlike agents, brokers could also participate in risk inspection, rate negotiation and claim processing procedures, etc. Bank assurance is anew concept, again started after the insurance sector has opened up. Under this concept, a Bank or Financial Institution takes the corporate agency of an insurance company, and starts selling the insurance products to its banking clients in particular and the general public Area Yield Insurance, viz. National Agricultural Insurance Scheme (NAIS), is credit linked, and hence, the product is rightly serviced through Financial Institutions (FIs). The product is compulsory for borrowing farmers, and the FIs extend insurance as and when a crop loan is disbursed. Non-borrowing farmers, for whom the scheme is optional, can avail insurance from the nearest branch of the FIs, by paying the requisite premium. This concept has been conceived as cost effective insurance marketing, with reasonable control over asymmetric information, particularly in case of borrowing farmers. This model, however, has not been Download 0.68 Mb. Share with your friends:
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