A small photo studio in T Nagar, Chennai, sold more than 50 general insurance policies in the last month alone. All that the buyer had to furnish was his name, address and the nominee's name. The policy document is issued in 15 minutes, shop owner M Raju Mani said.

With the general insurance penetration at a dismal 0.60 per cent (measured as a percentage of GDP), many companies feel that selling the policies through photo studios, grocery stores and even telephone booths would help improve the figure.

"We need to think outside the box and need alternative channels. If telecom companies are able to use grocery stores, petty shops and other small outlets, why not insurance companies?" said an Insurance Regulatory and Development Authority (Irda) official.

The Committee on Distribution Channels, headed by LIC [Get Quote] ex-chairman N M Govardhan, said in its report that one of the biggest challenges facing the general insurance companies was getting agents to sell their products. The report noted that people are not interested in becoming general insurance agents as the commission is quite low.

In 2005-06, around 40,551 agents were licensed by the general insurance companies compared to 7,21,696 agents employed by the life insurance companies. The committee was constituted by Irda.

Private insurers have already gone ahead and started exploring such channels. Bajaj Allianz General Insurance Company has introduced point-of-sale concept on a pilot basis to sell its products.

The point-of-sale concept started in Delhi, where the company's agent will go to the customers' homes along with a handy gadget like a Blackberry to issue policies on the spot, said Swaraj Krishnan, chief executive officer, Bajaj Allianz General Insurance Company.  

The company is also talking to some medical pharmacy chains to sell its health and home insurance products. For motor insurance, the company is in talks with oil companies to sell its products through their retail outlets across the country, he added.

The gadget costs about Rs 50,000. The company wants to supply the gadgets to all its branches, but there is shortage of these machines since there are only two Korean suppliers.

Similarly, ICICI [Get Quote] Lombard General Insurance sells its health and motor policies through photo studios and malls. The photo studio in Chennai is selling both the policies.