Today, supermarkets and retail chains are not only selling groceries and other consumer goods, but also a wide range of financial products such as insurance, mutual funds, loans, investment and savings instruments.
These chains, which were not considered as separate sectors a decade ago, have now become the biggest and most powerful business tools in the country. Pantaloons, WestSide, Big Baazar, FoodWorld, Reliance Fresh, Shoppers Stop, Spencers and Subhiksha have built strong reputations on the shopassurance front.
It is interesting to note that many financial business houses, especially insurance companies, are connected with these chains.
For instance, Kishore Biyani's Future group, which owns Pantaloons and Big Baazar, is a stakeholder in Future Generali India Life Insurance Company and Future Generali India Insurance Company. Ambani's Reliance Fresh is into life and non-life insurance, while ITC has an insurance brokering venture called ITC Choupal.
Everyday, millions of people walk into supermarkets and retail chains, which make them prime targets for retail houses to offer financial products. Future group, formerly known as Pantaloons, has sold over 3.5 lakh credit cards to its customers at Big Bazaar and Food Bazaar outlets.
The group is expecting around 200 million customers to walk into these outlets, out of which at least a substantial section could be prospective customers for financial products.
These markets and chains have a special appeal as they deal with different categories of customers on the basis of mutual relationships. This will make the insurer's job easier as insurance is also sold mostly on a relationship platform, according to industry experts.
After the insurance industry was opened to the private sector in 2002, both public and private sector companies have tried every possible channel, including direct agents, brokers, NGOs and SHGs, to sell their products. The latest channel was bancassurance. Now, shopassurance is set to become the brave new channel for insurance sellers.
According to industry experts, shopassurance has been successfully tested abroad. Leading retail giant Wal-Mart has been selling life and mortgage insurance in addition to motor, travel and home insurance, through its stores worldwide.
Today, insurers in India are set to follow the same model. Bajaj Allianz has tied up with Godrej Agrovet to sell its insurance policies through Godrej Aadhaar, an agri services-cum-retail shop.
MetLife Insurance has tied up with Mumbai's Apna Bazar co-operative stores to reach over 1.5 million customers. A recent insurer to join the race is Future group's Future Generali, which has floated life and non-life insurance arms, Future Generali India Life Insurance Company and Future Generali India Insurance Company. The company is planning to sell its insurance products through Big Bazaar.