Every insurance company has only two sources of revenue, viz., new insurance premiums and renewals. Since most of the insurance companies are new, new premiums are the primary source of revenue.
But going forward, recurring premium renewals and thereby customer retention will become a major source of revenue for the insurance companies. Currently insurance renewals are either paid at the counter or are collected by the insurance agents.
Some private insurance companies also collect premiums over the Internet. Although the results are encouraging, net penetration remains an area of concern. As per IAMAI the net penetration in India is 3.6% and hence insurance companies are looking at alternate channels for online renewal collections.