Sales is an important function for an insurance company, as people in sales reach out to potential and existing customers to bring in revenue for the company. Sales for an insurance company happens in two areas:

• New sales: New sales is the sales when a policy is sold for the first time. This sales can happen via various channels. We will look at the different channels in the next section.
• Renewals: Renewals are the sales which happen when a customer renews the policy before it expires. The renewals are not applicable for those policies which have single premium. Renewals are more relevant for term insurances, health, motor, property, fire, marine, and similar type of insurances.

In insurance, sales can happen via various channels. The following figure gives the perspective.

The different channels which are shown in the previous figure are explained below.

• Direct Sales: Direct Sale is done by the company itself. This is achieved by the network of offices across the geography it operates in. The insurance company has a head office and then multiple zonal offices. Each zonal office has regional offices, and so on. The following figure depicts the hierarchy:

• Web Sales: With the advent of technology, people have become comfortable buying online. The insurance companies use this to their advantage and give the option of buying policies online for the end users. Having a good web sales strategy helps the companies reach out to a wider audience, and at the same time, cut down on cost. The online portals give the option of online chat to the buyers to get their queries resolved and help them choose the policies they need.

• Agents: Insurance agents are essentially individuals who are not direct employees of an insurance company. They are usually self-employed and they reach out to their potential customers with the intention of selling them policies. An insurance agent can be dedicated to one insurance company or can carry policies from multiple insurance companies. For every sales that an insurance agent does, he receives a commission. The insurance agents are another way for an insurance company to reach out to a large audience and keep the cost low, as they are not on the payroll of the insurance companies. The insurance agents bring in human element for customers who prefer interacting with a person and getting to know the different policies.

• Institutional Sales: As the name indicates, the sales done by institutions are referred to as institutional sales. These institutions can be large financial institutes, banks, or brokerage houses. Normally, they sell to HNI (High Network Individuals) customers. These institutions have a field force of their own and help the insurance companies reach out to larger audience. These institutions get a commission for selling the products of an insurance company. They typically carry products from multiple insurance companies. Apart from insurance, these companies may carry other products as well, such as mutual funds, loans, and other investment products.

• Third Party Sales: Another way insurance companies sell is via third party sales. An example can be third party websites. Such websites are aggregators and provide a single interface for the buyers to look at products from different insurance companies. The buyers can give input parameters, such as age, insurance amount, duration, and so on, and these websites then contact individual insurance companies and get premium values. The user can then choose the one that best suits him/her and even buy the policy online. These websites earn commission on each policy sold via them.