 "LIC loses 20% agents in six years")
Life Insurance Corporation of India (LIC) has seen about 275,500 individual agents leaving the agency in the past six years. The country’s largest insurer had 1.33 million agents at the end of 2010-11, which fell to 1.06 million at the end of 2015-16.
The life insurance industry has been facing the challenge of agents leaving the profession. Data from the Life Insurance Council, the industry body for life insurance companies, show that companies have lost 51,278 agents in 2015-16. Data show LIC saw 102,044 agents leaving its fold in FY16. Private life insurers, on the other hand, made an addition of 50,766 agents in the last financial year.
LIC did not respond to a query sent by Business Standard.
The Insurance Regulatory and Development Authority of India (IRDAI) had in an exposure draft on remuneration for insurance agents and intermediaries proposed higher commission for agents in the first year and in subsequent years to incentivise distributors. It also said insurance companies can give rewards over commissions.
The industry has been facing the pressure of agent attrition, including voluntary and involuntary attrition, due to low productivity and the inability to generate adequate number of new policy sales, lack of incentives and poor career development prospects.
In its annual report for 2014-15, the IRDAI had said a reduction in the number of agents might adversely affect life insurers’ business, persistency and public perception of the agency channel as a stable career. However, in the past few years, private sector players and LIC have been taking efforts to ensure that a proper career path is charted out for agents.
The life insurance industry has been facing the challenge of agents leaving the profession. Data from the Life Insurance Council, the industry body for life insurance companies, show that companies have lost 51,278 agents in 2015-16. Data show LIC saw 102,044 agents leaving its fold in FY16. Private life insurers, on the other hand, made an addition of 50,766 agents in the last financial year.
LIC did not respond to a query sent by Business Standard.
The Insurance Regulatory and Development Authority of India (IRDAI) had in an exposure draft on remuneration for insurance agents and intermediaries proposed higher commission for agents in the first year and in subsequent years to incentivise distributors. It also said insurance companies can give rewards over commissions.
The industry has been facing the pressure of agent attrition, including voluntary and involuntary attrition, due to low productivity and the inability to generate adequate number of new policy sales, lack of incentives and poor career development prospects.
In its annual report for 2014-15, the IRDAI had said a reduction in the number of agents might adversely affect life insurers’ business, persistency and public perception of the agency channel as a stable career. However, in the past few years, private sector players and LIC have been taking efforts to ensure that a proper career path is charted out for agents.
At LIC, according to its annual report for 2015-16, various clubs have been formed to motivate and recognise high and consistent performers. LIC also has a scheme to professionalise the force. They are given stipends at the start of their career to help them settle down in the profession. A city career agents scheme was introduced in 2010 to provide an opportunity to all development officers to recruit agents on stipends. There were 1,772 city career agents as on March 31, 2016. There were 6,429 urban career agents and 14,302 rural career agents as on March 31, 2016. The number of active LIC agents as on March 31, 2016, was 1,018,039 against 1,081,495 on a year-on-year basis.