A Conceptual Study of Malassurance – The Emerging High Potential Insurance Distribution Channel

The insurance sector in India is on a high growth trajectory and has been growing at an attractive pace in the post liberalization era. Though insurance penetration has increased from 1.4% in 1999 to 4.7% currently, it also points out the huge potential that is waiting to be tapped. The liberalization of the sector in the year 1999, opened up the flood gates of competition. The intense competition has led to paradigm changes in the industry in terms of product offerings, introduction of riders, emergence of new distribution channels etc., The industry for a long time had been relying on the agency channel for garnering business. However the need for remaining competitive, reaching out to customers in different demographic segments and the imperative of faster growth have led insurers to innovate with regard to distribution channels also. In this context, a new emerging channel is malassurance, which is the distribution of insurance through malls. With the organised retail sector expanding at a rapid pace, there has been a phenomenal increase in the construction of malls. The rising foot falls in malls has motivated Future Generali Life Insurance Co., to tap the potential of this emerging trend and distribute insurance through malls. This paper discusses the concept of malassurance, the performance and potential of malassurance, the current scenario and also the measures taken by the company to make it successful.