services, more specifically insurance
services, in a developing country like India is extremely low as
compared to developed countries like the US, UK and Japan. On the
S-curve of insurance market development, India would lie at the nascent
stage of the curve. According to a report on World Insurance by Swiss
Re, the market penetration of General Insurance products in India in
1999, measured as a percent of Gross Premiums to national GDP, stood at
0.5 percent as compared to 4.3 percent in the US and 3.1 percent in the
UK.
Alternatively, in India, the
Gross Premiums per capita (in US $) stood only at $ 2 in 1999 as
compared to $ 1,741, in the US, $ 806 in Japan and $ 741 in the UK. The
figure quoted above is for the overall market - urban and rural put
together. It clearly highlights the vast growth potential of insurance
market in India.
Banks, Life Insurance and
General Insurance companies - both Indian and Multinational – are vying
with each other to tap this huge market and gain market leadership by:
(i) Devising financial products and
services customised to the needs of the customers; and
(ii) By devising alternative
distribution channels- that are responsive, efficient and cost
effective-to reach out to customers located in the remotest corners of
the country.
In order to achieve the above
objectives, most of the organisations are entering into partnerships
with civil society organisations having a strong foothold and reach in
rural India. These kinds of relationships get further strengthened when
are partnering organisation like TARAhaat – having strong reach in
rural India and pursuing social objectives by applying rigorous business
methods and tools – joins hands with the ICICI Group.
ICICI is one of the market
leaders in the Indian Financial Services Sector. It provides a wide
array of financial services to corporations and individuals, including a
comprehensive portfolio of banking, savings products and insurance
services, both life and property and casualty. While TARAhaat has had
discussions with all the leading institutions in this sector over the
years, the Industry focused on the more lucrative urban markets. The
recognition that rural markets, with more than 750 million individuals,
can be served by organisations like Development Alternatives and
TARAhaat, has finally provided an impetus to the mainstream corporations
to explore alternative distribution strategies, leveraging on the
distribution reach of established civil society organisations.
The banking conglomerate is
internationally respected for its aggressive marketing and innovation.
TARAhaat and ICICI have initiated a partnership that has, as a first
step, deployed a program to distribute products and services customised
for the rural markets in the insurance and banking areas. The next
stage of the partnership will provide a large number of financial
products and services urgently needed in rural India. This partnership
holds great promises for TARAhaat’s Franchise Network in diversifying
sources of revenues and reducing the dependence on training and
educational products. TARAhaat’s association with ICICI also helps to
build its own Brand recognition and strengthens its market
acceptability. ICICI, on the other hand, gains from the creation of new
markets and channels – a classic win-win situation. TARAhaat and ICICI
have already launched some products in Punjab and Bundelkhand to great
success.
The TKs in Punjab and
Bundelkhand have started selling insurance policies and are quite
excited about this opportunity to generate additional revenues for
their TKs. Partnership with ICICI has also made a huge difference in
people’s perception about TARAhaat. It has started creating a positive
impact on our prospective franchisees. This was reflected in the recent
franchise sign-ups Jhansi, Mansa, Tarn Taran, Phagwara and Bhikhi.