Walk into any supermarket, bank, post office, ATM, Internet kiosk or departmental store today and you can pick up an insurance product virtually off the shelf.

To wit: Mumbai's Apna Bazar Co-operative stores chain on Friday tied up with MetLife India to hawk the insurer's wares to its customer base of over 1.5 million in the metropolis and beyond.

Earlier, the Department of Post tied up with the Oriental Insurance Company for the same end. So the postman will not only deliver the mail from now on, he will also sell insurance products. With competition heating up, alternate distribution channels are gaining tremendous importance.

And barriers distinguishing various financial services and products are also being removed. So today, you can buy a toothpaste and win a dental insurance product -- or by a home loan product and get life insurance cover free.

Till the opening up of the sector, Indian insurers sold risk products using the agents' -- or "agency" -- force. The reliance on a single channel limited reach and penetration.

The first non-traditional channel for private insurers following liberalisation, bancassurance, got off to a flying start because insurers had little option but to tap an existing network to expand reach.

It has been a successful alliance, though. Many private insurance companies today say sales through the bancassurance channel is more than half of total sales.

Banks have themselves gained from such linkages. In the first quarter of fiscal 2004-05, SBI Life Insurance's total premium collection was Rs 51 crore (Rs 510 million). Of this, Rs 13 crore (Rs 140 million) came through the agents' channel, and more than double that -- or Rs 27 crore (Rs 270 million) -- through bancassurance.

Corporate agents -- such as the SBI-GE credit cards venture -- contributed Rs 11 crore (Rs 110 million). "Productivity per bank employee is as high as 26 policies per year against 18 sold by agents," said SBI Life CEO S Krishnamurthy.

For banks, it's a win-win deal -- it boosts their fee-based income, and helps them gain some free publicity and advertising space. Next in line are tie ups with trade unions and potential channels in the hinterland such as co-operatives.

Insurers are bracing to tap micro-insurance possibilities by launching products for the rural masses. Trade unions can leverage employees, especially in the unorganised segment, while co-operatives are excellent platforms to sell products to farmers and farm labourers.

So what's next? "Many more channels could spring up. The industry hasn't tapped them all yet," said a sector analyst. The game, he says, will be fought on how well the products are distributed.

Insurers think the day is not far when a person buying cereals at the local supermarket could also pick up a term policy from the next shelf.

Link-ups like the one with Apna Bazar makes this a possibility.