India Post, the department of postal services, is working to set up an insurance company.
India’s federal communications minister Manoj Sinha told Press Trust of India, "Department of Posts is now reincarnating itself. After diversifying its business with a parcel directorate and a payments bank, the department has decided to set up an insurance firm as a special business unit in two years."
"The request for a proposal to appoint a consultant for setting up an insurance unit will be floated in the coming week," he said.
If the proposal of India Post to set up an insurance company is realised, it could transform India’s insurance scene because of the trust and credibility India Post enjoys in the country especially in rural areas. The Department's manpower and vast reach would be other advantages.
India Post has an army of 300,000 postmen and 'Grameen Dak Sewaks' (rural postal employees) who, aided by digital technology, are delivering financial services for the India Post Payments Bank (IPPB) which was inaugurated by Prime Minister Narendra Modi on 1 September 2018.
IPPB, which will be available through 650 branches and 3,250 access points immediately, will be available at all 155,000 post offices by December 2018.
Insurance will not be a new area of business for the India Post. It currently offers one of the oldest life insurance schemes in India for the benefit of government and semi-government employees—Postal Life Insurance (PLI) which was introduced in 1884. In addition, Rural Postal Life Insurance (RPLI), introduced in March 1995, provides insurance cover to people residing in rural areas.
As at 31 March 2017, there were 4.68m PLI and 14.68m RPLI policies across the country.
Mr Sinha early this year also announced the opening of PLI to professionals as well, which has led to a surge in PLI revenue. "The entire postal department is transforming now," he said.