In previous years, the focus was customer acquisition, according to the stockbroking firm YES Securities (YSL). However, traditional channels of agency, bancassurance and brokers are now being upgraded in line with a focus on customer retention, YSL said in a recent report.

Banks have recently adopted an open architecture, so banks can sell insurance products of up to nine insurers, resulting in stiff competition. Insurers are now reducing their share of business from the bancassurance channel.

Additionally, private players are shifting their focus to the agency channel, by training, facilitating and using digital infrastructure. Digital channels have become more relevant, as India has over 450 million monthly active internet users. The emergence and development of e-commerce platforms in the country has modified the customer experience in buying products and services.

YSL is expecting a rapid increase in the use of the digital channel by private insurers. While the cost involved in terms of opex and capex is higher, the bigger share of high-profit protection via the online channel ensures a high profit.